Analyzing First House Hack

[Nathan Reed]

I am trying to get started in real estate investing by purchasing a multi-family property that my family of 3 can house hack and turning my current sfh into a rental. The multi-family properties that are available in the suburban Baltimore area don't meet the 1% or 2% rules as properties in other markets do, but transitioning from paying my own mortgage to house hacking puts me in a substantially better financial position regardless.

I still want the property I pick to cash flow reasonably well so that I have the option of moving out of the multi-family property within a few years (possibly to house hack again). A few questions:

- I see recommendations for setting numbers ranging from 5% to 10% of monthly rent for maintenance, capex, and vacancy. Depending on whether I put those numbers at 5%-10% makes a big difference in the cash flow of the property. Any advice?

- I plan on managing the properties myself as I will have a max of 4 units to manage from one purchase. I've still been running the numbers with 10% of monthly rent allotted for PM as a lot of advice on BP seems to suggest to keep this in the analysis, but this also makes a big difference on cash flow. Is it reasonable in the case of a house hack to eliminate this expense from analysis?

- High taxes in MD coupled with raising maintenance, capex, and vacancy toward 10% of monthly rent puts my opex above 50% of gross rent. As MD has a high cost of living, is this par for the course in class B areas of MD?

- Any other advice out there for a first-time house hacker looking to make the right purchase as the first step to REI and financial freedom?