Deal Analysis for House Hacking

[Samir Patel]

Hi,

I want to locate my first investment property that I plan on purchasing with an FHA loan and house hacking (living in one of the rooms and renting out the others) in Northern Virginia. Since there aren't many multi-family properties in my local area, I've been looking at townhomes and single family dwellings that have many rooms as well as a basement that I can rent out. With the current real estate supply being limited and demand skyrocketing due to tech companies moving into the area (e.g. Amazon), the home prices are relatively high. That being said, I was wondering if I have done an adequate job of analyzing this deal and if there are any abnormalities in my assumptions (Vacancy, CapEx, Income/Expense/Property Value increase per year, etc.). Here's some additional information on how I did the calculations in the report, as well as some insight into my current situation.

Average Rent: Did an initial search on Rentometer for average rent in this area (calculating based on $725; 3 bedrooms).

Expenses: I am using the 50% rule to calculate my expenses which is why I have left the "Fixed Landlord-Paid Expenses" empty. For the "Variable Landlord-Paid Expenses", I have used the following assumptions (Vacancy: 5%, Repairs and Maintenance: 4%, CapEx: 8%, Management Fees: 0%).

About me: I am relatively young (25 years old) and am looking to get started in the real estate space by house hacking my first property. I have spent the last 3 years educating myself by reading various books and listening to real estate podcasts in my free time, so I'd like to finally get started now that I'm somewhat ready. During that time, I have also been incrementally increasing my cash reserves and I currently have enough to cover any expenses for at least a year in the case that I can't find a tenant and the property sits vacant. It may be overly cautious, but I'm just trying to be as prepared as I can so any notes on what I may have overlooked or should be aware of before proceeding further would be greatly appreciated. Thank you in advance for taking the time to ready through this and any feedback that you may be able to provide :)

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*This link comes directly from our calculators, based on information input by the member who posted