House hack vs rent + single family - in a conundrum...

[Josiah Sia]

Hi there! My family wants to move to a location that is closer to our work. Right now I have about an hour commute in the morning and sometimes more in the PM. My wife has about a 30 minutes commute to and from work.

We are looking at locations that gets my wife about a 10 minute commute and mine about a 20 minute.

Here is the conundrum:

Do we house hack and sell our current single family home OR rent it out and move into another single family home. I know we could rent it out and house hack at the same time, but I am a noob to real estate investing and would like to go slow... not 2 real estate investments at once...

• Option 1: Selling current single family home + house hacking:
  • If I go this route I will need to sell the single family home we are in now. We will make about $15,000 from it and that would help with the down payment for a Duplex closer to our work. We would live in half the duplex and rent out the other half. This would also give me experience in the REI game
• Option 2: Renting our current single family home + moving to another single family home:
  • This option would allow me to get experience with renting Single Family homes. The home that would be rented however, based on the BiggerPockets calculator, has a -$111 cash flow and -15.87% cash on cash ROI. With that said, my family members are saying it's still worth renting it out because of the tax benefits + equity growth.

What would you do? Any recommendation on renting the current home with the negative cash flow and cash on cash ROI just for the tax benefits? I know house hacking is one of the "best ways" that is recommended for first time Real Estate Investors.

Would love to hear any opinions and advice for my situation.