Budgeting for first purchase

[Don Young]

Hi BP!

How do you all budget for a new investment property purchase?

I have been saving with the goal of purchasing a duplex within the next year or so. I'd like to house hack. I've realized I'm more likely to make this happen faster if I can figure out exactly how much money I need to have saved up to get started without spreading myself too thin. I plan to keep a personal emergency fund of 10k in the bank that I'd prefer not to touch.

Duplexes in my area run around 120k. I'm assuming I can get an FHA loan for 3.5% down...I'll verify this with lenders as I get closer to being ready. I know I need to budget for closing costs and I've read these can be between 4-6% of the purchase price. Have those of you in the Akron and Cleveland areas seen these numbers?

I'd also like to have some percentage of the property's value set aside for any big emergency repairs. How much do others budget for this kind of thing? 5%? Do you consider your personal emergency fund as money that can cover these costs, or do you stay conservative and have a separate sum set aside? Do you use the same percentage and set aside a chunk for each new property you buy, or do you maybe decrease the percentage as you get more properties and have a bigger chunk of money saved?

Thanks in advance for any input you can offer!