Have you ever wanted to ask someone how it all began? How did you get started? What was your first move? Well here is how I found, moved in, and updated my first house hacking project.
After a quick and simple house flip in Central Virginia my wife and I moved to Minneapolis after accepting a new job opportunity with my W-2 corporate employer. We knew that we wanted to continue real estate investing once we arrived but were unsure of the market and real estate environment that we would be entering. After arriving we got settled in a temporary rental for 6 months which allowed us time to understand the area and choose where we wanted to live. The second week we were in Minneapolis my wife and I attended a small get together with my co-workers and friends. This is where it all started...
I am not what you would consider shy by any means, but I was in an unknown environment with new coworkers and friends. I ended up talking with a friend of a friend's husband who was a local broker and I soon realized had extensive knowledge of the city and current market. Of course, our conversation took a turn to real estate and I expressed our desire to continue investing in the area. We talked about Multifamily real estate mostly discussing area of the city, price points, where he was investing; heck I had a million questions.
Like any successful realtor should he followed up the next day by connecting with me on LinkedIn with a possible property that we could look at. I thought to myself "wow that was quick" and started to second guess investing in a multifamily property with "What If" thoughts.
"What if the market crashes? What if I can't find a tenant? What if the foundation has issues? What if the roof starts to leak? What if? What if?
This was just fear pushing into my mind and it all happened so quick that I did not even go look at the property. This broker who by the way is still awesome today ended up purchasing that 4 Unit / 4-Plex for his personal portfolio. A few months later I reached out to him to let him know that we thought we were ready, and it turned out he had a triplex in an up and coming area that would be hitting the market in a few days. We asked if we could see it prior to it going live on the MLS and the seller obliged.
It was a little scary to the eye to say the least. It had a massive vine that had been growing down the entire side of the house from roof to ground. It was brick but it needed paint on all trim, shutters, porch, etc. The front balcony was leaning a little and the gutters had small shrubs growing out of them.
Is this what we really want?!?
It was a triplex that consisted of three different units with their own entrances and a three car garage in the back of the driveway. I was mentally prepared that whatever we found would need work, but I wasn't sure that my wife was on board yet.
After walking the property, we sat down in our agent's car and talked about the place. The mechanical of the home worked, we found out the roof was only 7 years old, the rents seemed under market, and the asking price was reasonable.
Should we do this? Let's do this!!
We purchased the property for $377K which included us splitting the cost of a new boiler which inspection turned up was not meeting current standards. We used an FHA loan that only required us to put down 3.5% of the purchase price, so after adding in closing cost and other fees we actually purchased out first triplex with less than $20,000 out of pocket. That is right, less then $20,000 out of pocket and we now owned three units in Minneapolis, MN.
Before Images of our first House Hacking Project.
After Images and some Sweat Equity.
We moved into this property a month after closing and notifying the residents upstairs we would not be renewing their lease. We made some much needed and cheap updates like lights, fans, paint, outlets, switches, and carpet. I also did some light fixture updates such as changing out the toilet, kitchen faucet, and bathroom faucet. You may say you can't do this; let me tell you that anyone can paint. It just takes a little money, time, and sweat. If you can't do the plumbing or electrical fixture changes it does not cost much to hire a handy man to make the changes that we did as there is not much plumbing or actual electrical work involved. Three months after doing this we moved downstairs and did the same thing. We did not make any changes to the third unit. We moved out after about a year and purchased another property.