House hacking

[Drew Cameron]

This past week I went to a local meetup for real estate investors in Scottsdale and met a man who just bought a duplex. He was living on one side and renting the other which brought his mortgage down to $50 out of pocket. I am currently a renter and looking for a house to buy. House hacking was on my radar before, but after hearing this story it's once again at the forefront. I've been running the numbers on some duplexes all over the valley from Mesa to Glendale. It seems like they all will cash flow nicely if they are rented on both sides or can provide free or nearly free housing if I live in one side. Is it really that simple as finding a duplex off the mls or Craigslist? Am I missing something?

[Sam Steadman]

@Drew Cameron

That is an AWESOME idea. 

I would never say it is "that simple", however I would suggest the idea that it is more simple than what many people would assume when looking into an investment property. Obviously, it is a great idea to have someone else pay for your mortgage and help relieve one of the biggest expenses in ones life (mortgage payments). I would say that you are in a GREAT spot and to keep researching more on BP about the process of purchasing, renting, and selling an investment property like a duplex.

There are a lot of cool financing opportunities like FHA loans with only 3.5% cash down or even some conventional loans with 5%,10%, or 15% down. I'd say to look into all these options and the extra expenses/insurance that goes with each one and find the one that best fits you.

My biggest word of advice though would be to build a model for the duplex. Look at revenues, expenses, appreciation estimates, etc... Even create a "best case scenario" and "worse case scenario" for the property so that you can go in feeling prepared and informed.

Hope this helps. If I can help in anyway please reach out. I know a lender in Arizona and could possibly throw you their information if you want to hear more. 

Sam