First Time Homebuyer, House Hack in Rochester, NY

[Mary Bailey]

Hi everyone! My name is Mary, and I'm new to BiggerPockets. I live in a suburb of Rochester, NY, and am confident that there are deals to be found in my city. I've never owned real estate before, but I'm beyond ready to get started. 

I recently came across a 4-bed, 1.5 bath property that I'm VERY interested in purchasing, with hopes of "house hacking" 3 of the bedrooms to other female college students (I'm also considering using the rooms as AirBnb rentals during school breaks/summer vacations). I wanted to run the numbers on this property, using my knowledge of the area (as well as my knowledge of college students) to see if it would produce the rental results I'm looking for. I've outlined the key points of my analysis below; I would appreciate any and all feedback/advice! I want to make sure that my calculations/assumptions are correct before I embark on any type of next step.

Knowing what I know about CMAs, I'm confident that the property in question is worth around $130,000, so for argument's sake, we'll consider this the purchase price. 

In and around my town, there are a number of colleges, community colleges, trade schools and universities. People overlook Rochester, but there are a LOT of renters in this city. And in the area I'm looking at, some students will pay a premium to live in an off-campus house that is clean, modern, safe, and with other like-minded students. I have driven by the house, it's in an area that I adore, it has been maintained well, recently remodeled etc. I'm confident that I could find tenants to pay between $575-$625 per room, per month. (575+600+625=$1800 gross rent/mo)

As a first time homebuyer in NY, I'm eligible for up to 97% FHA financing as well as Down Payment Loan Assistance (DPLA). Although I have decent savings, I'm weary about using it for a down payment. I would rather save it for the first couple months of holding costs/an emergency fund/what-if-I-don't-find-any-tenants (vacancy) fund. For those who opt for the DPLA (at 4.75% interest), the calculated monthly payment is $5.22 for every $1,000. Meaning that, for me, my calculated monthly P&I payment is $678.60. Additionally....

PMI: $65

Property taxes (school/village/county/city), monthly: $296

Maintenance/Repairs fund (10%): $180

Insurance: $55

RG&E: $100

Vacancy (5%): $90

Water/Sewer: $35

TOTAL FIXED EXPENSES: $1509.60

So based on what I have above.. this would seem like a good deal, would it not? On paper, it sounds great. It generates a positive cash flow of $291, and that's not including any AirBnb rentals. 

So of course, like many investors, my biggest hurdle is financing. My question is.. would it even be possible to receive first time homebuyer's financing with little money down (or with down payment loan assistance)? Has anyone done this? I've never done it before, and I can understand why a bank would question whether or not they should loan to me. So, in general, what would you say are my options going forward? Would it be beneficial to find a co-signer? Should I ask about lease-options? Ideally, my plan would be to move in to the home this summer and have it rented by the time school starts in Sept. 

Again, if you've read this entire post, THANK YOU SO MUCH. Getting into real estate has been my dream since I was a girl. I know that sounds crazy, but I was never a good student and even dropped out of college (multiple times) because I realized the only reason I was even attending was to get a degree that would allow me to get a job that would pay well enough to let me afford my first house.. wow that's a mouthful. But it's true. I've considered majoring in hotel management, hospitality, interior design, architecture, sales, HR, finance, management, financial planning... but I was told my entire life that I would only be successful if I went to college and got a degree in ONE of those subjects. Yet here I am, 24 years old, and have yet to see the success. 

I'm ready to define success for myself.

Although this is my first property, it DEFINITELY won't be my last. When I was 15, I drafted a plan to buy 20 houses by age 30. Unfortunately, my calculations only included a mortgage payment and taxes because I wasn't sure at all what I was doing.. But at such a young age, the real estate investment wheels were turning in my head. 

I am 100% self-taught. So, please, if I calculated something incorrectly, or if there's a piece of the puzzle that I'm still missing, help a girl out!

Happy Investing!

-Mary