Peter Keane-Rivera has particular criteria whenever he shops for funding properties.
The Seattle-based millennial, who supplements his engineering pay alongside rental income, looks for ample homes — at smallest 3,000 quadrate feet — alongside unfinished basements, which provision him area to add value.
His scheme is to buy and clasp long-term rentals, afterward rent them out by the room.
"The additional rooms, the additional prosperity flow," Keane-Rivera, who has 19 units throughout three properties, told Business Insider.
He opened the books on his latest acquisition: a approximately 100-year-old, 3,900-square-foot home in Kent, Washington. Business Insider reviewed home loan statements confirming his ownership of the property. Keane-Rivera converted it from a five-bedroom residence into a nine-bedroom rental that generates concerning $2,500 a duration in profit.
The deal: $630,000, negotiated downward from $665,000
Keane-Rivera bought the asset in December 2024. It had been listed for $665,000; he offered approximately $625,000, and the two sides ultimately accepted on a $630,000 acquisition price.
There's no "secret sauce" to negotiating, he said.
He looks for properties that have been sitting on the market and have a fixable flaw. In this case, a powerful cat urine odor was an matter he addressed using ozone machines.
"If there's a defect alongside it that's not apparent in the pictures, much akin the cat urine, afterward you get a lot additional wiggle area in conditions of offers," he said.
Investors who scour listings all day are frequently rewarded for their diligence.
"You have to appearance everywhere," he said, a procedure that can obtain time. It took him eight months to discover this particular property.
The upfront costs: a 5% downward payment, affirmative renewal costs
Keane-Rivera put 5% downward — concerning $32,000 — and used a accepted loan. His first involvement charge was 7.75%, but he accepted to pay a 1% premium in toggle for a $10,000 decision credit.
The trade-off made awareness for his circumstance since he planned to refinance quickly and wanted to maintain prosperity for the remodel. He refinanced following 12 months, inside the 18-month opening in which the higher charge motionless penciled out in his favor, he said. His new charge was 5.375%.
Putting small than 20% downward mostly triggers personal home loan insurance, or PMI, but Keane-Rivera stated a lesser downward fee freed up prosperity for a remodel that ultimately disbursal concerning $150,000 — additional than he had budgeted for. He took out a $50,000 debt from his 401(k) to assistance prosperity the renovations.
"Had I put in item larger than 5%, I would have established myself in trouble," he said. His prosperity was tight adequate that he additionally had to obtain on important sweat equity fairly than employ professionals for all part of the project.
Keane-Rivera completed the earlier unfinished basement, adding three bedrooms, two bathrooms, a kitchen, laundry area, and usefulness space. He additionally converted the dining area into another rentable bedroom.
After refinancing, the asset appraised for $875,000.
The prosperity flow: concerning $2,500 per month
Before refinancing, Keane-Rivera stated the asset generated little, if any, prosperity flow.
"Some months I would endure money, several months I'd interrupt even, and several months I would create akin $100," he said. "But that was all part of the calculation. It was going to disbursal me a lot of prosperity to do the remodel, but following everything's stated and done, it should create a elevated amount of prosperity stream to create it all worthwhile."
When his involvement charge cut from 7.75% to 5.375%, the property's prosperity stream improved significantly.
As of September 2026, the nine-bedroom rental was bringing in concerning $8,876 a duration in rent. BI reviewed the lease agreements and confirmed the rental income. After expenses, Keane-Rivera stated it was generating approximately $2,500 a duration in prosperity flow. Some of his representative monthly expenses include:
- Mortgage payment: $4,786
- Utilities: $690
- Property taxes: $607
- Insurance: $212
He no longer pays PMI since his chief balance has fallen to 80% of the home's first value.
Utilities ran approximately 40% higher than Keane-Rivera expected since of mediocre insulation; one winter heating invoice reached concerning $1,000. He has since added attic insulation and sealed the windows to lesser costs.
The home's age additionally brought another unexpected expenses, including concerning $10,000 to substitute old wiring and a $2,300 rent credit for a tenant who slipped on synthetic sheeting during washroom construction.
As a landlord, "there's continually item going on," he said.
The operational reality
Keane-Rivera stated the key to renting by the area is finding compatible roommates. He asks prospective renters concerning their former roommate cognition and looks for group apt to live considerately alongside others.
He manages his properties himself, alongside assistance from virtual assistants that grip listings, first tenant screening, and project scheduling. He estimates he spends concerning five hours a week on his three-property portfolio and hopes to decrease that to one or two by outsourcing tasks specified as pace maintenance.
Having multiple units under one rooftop simplifies operations and allows him to create prosperity stream during providing lower-cost accommodation in an costly area.
"The logic for acquiring and expanding a ample single-family residence is to hit an economics of measure that allows me to provision fine quality, low-cost housing," he said, "and create a fit gain in a genuine asset surroundings that is subjecting all of us to higher disbursal of living, involvement rates, and asset cost volatility."
