Monthly Affordability Advice

[Stephen Roesler]

So I would love some insight about leveraging responsibly. A little background on the situation - last week a short sale was listed on the market in my area. Initial impressions and listed price were of great interest to me. Within 3 days on market, it went under agreement, before I got any questions answered by the listing agent. Trying not to dwell what could have been, although it felt like the opportunity I've been looking for to break into REI.

Anyways, I was running numbers for what down payment would be optimal for this house-hack, which was a 2-family (2BR/1BA, 1BR/1BA). Either unit rented out would have been $500-1000 out of pocket while hacking, which would still be cheaper than a cheap condo or renting in our market. Renting both units after moving on would have net approx. $450-775/mo.

Our concern during analysis was that the estimated mortgage payment would have been 50-60% of our net income, which we would never consider if rental income was not in the picture, but I would be comfortable with until getting a unit rented. If I want to get into a multifamily property in my area, this is going to be the realistic situation.

Is this amount of monthly leverage unreasonable even if we could cover the payment until the vacancy is filled?