Cash flow calculations for owner-occupying a MFR

[Adrian Birchler]

Do you change your cash flow calculations when “house hacking”? I am very excited to get started in re investing with purchasing a 2-4 unit with an FHA loan and living in one of the units. I have been using the 50% rule and trying to get as close to the 2% rule as possible while analyzing properties. This often leads to decent cash flow ($100-$200 per door). However, this is accounting for all units being occupied and if occupying one unit this can be a loss of quite a bit of rent. When this rent is subtracted from the gross income I have a hard time finding properties that work out to cover expenses and mortgage. I hear tons of stories of others using this strategy and “living rent free”. So, I am wondering if the above factors call for making any kind of alterations to calculations when searching for a good deal or if the market I am in simply doesn’t allow for meeting all of these criteria. Should I hold off for a deal that does meet the above or find the best option available now and start building wealth?