Property assessment calculations for live-in investor

[James Daleiden]

Hey BiggerPockets Community,

I’m relatively new here, and I’ve been trying to take full advantage of all the information on this great site. I’m in the process of preparing to buy my first property, but I have a question regarding property assessment calculations. I plan on buying a 2-4 flat, rent out the best units, and live in the worst unit and renovate it. However, when I try to assess the profitability of properties things get a bit confusing. The cap rate, cash flow, and other calculations strongly depend on how I treat the money I’ll be saving in rent.

I figured if the cost of prop tax, interest, insurance, and basic maintenance is equal to or less than what I’d pay in rent, then even I don’t collect any rent for a while, it’ll still be a wash financially. But I’d like to be able to apply all the calculations everyone else uses as well. My apologies if this has been covered elsewhere on the site. Thanks much!