How much time to cash flow house hacking w/ an FHA?

[Susan Franke]

Hi all. I want to make sure my expectations are where they should be. Looking to buy our first property - a multi family purchased with a low percentage down - either FHA or conventional depending on the property. We have in mind that we want to get $100 per door when we move out in a year or less, so we're running all our numbers with this in mind. With the small down payment combined with mortgage insurance, getting to this ideal seems very difficult. Should we be expecting this right upon us moving out, or should we be giving ourselves more leeway? I'm calculating how much we can pay for a property to get that magic number of $100/door, then thinking to offer across the board this number for multiple properties and hope someone bites...does that sound like a good way to do things? Thanks so much.

[Charles Baldi]

@Susan Franke

I am currently closing on a duplex using an FHA loan and I will cash flow just over $100/unit when I move out (after taking into account capex/repairs/vacancy/paying property manager). It is absolutely possible and a great approach since 3.5% down is a low barrier to entry. Near me (Montgomery County, PA) not every area and most properties would not cash flow, so you may have to be willing to learn more about the best place to look near you. I personally just set up a search on realtor, Zillow, and MLS with my realtor and would run numbers on every 2-5 unit that popped up and offer on the ones which worked or were not too far below asking. In the end we made 5 offers, had two accepted with one falling through and are closing on a duplex July 12th. We did it by buying on the outskirts of a C+ neighborhood within two blocks of a B neighborhood so the area was nice but the cost was low. Hope this helps, fee free to reach out!