Running the Numbers - Duplex in Austin, TX

[Dave Kay]

I'm looking for my first house-hacking investment in the Austin, Texas area but am running into a couple of issues. 

I was considering an SFR and renting out rooms, but I'm starting to think I'll get better renters/less vacancy/an all-around better experience if I find a multi-family unit.

I came across a few multi-family units in the mid 400's. They're duplexes and have 2-3 bedrooms and 1.5 - 2.5 bathrooms per unit. It seems like they're renting anywhere from $1200-$1500 (in 78729, which seems to be a sufficiently decent part of town?). My issue with this is, with full occupancy, 15% maintenance/capex, 8% vacancy, 5% PMI, etc, I'm looking at -$600 a month approximately. Meaning if I take up one of the units, or even 1 bedroom in a unit, I'm out more like $1K or more a month. 

Questions: 

1. Are my numbers right here? Am I missing something? Are these duplexes just too expensive to be worthwhile, or is this about right/fair in Austin right now? 

2. At what point do the numbers make sense/not make sense? I'm really hoping to at least break even if fully occupied. But perhaps it's worth it for the equity gain and the potential appreciation of rent in the coming years? Plus I'll save a couple hundred a month when I lose that PMI?

My goal is to be able to use this property as a stepping stone to buy another next year, etc and start seeing some cash flow coming in. I also have the flexibility to consider other markets as I work from home (and will for the foreseeable future), but I know this area and like it more than most. 

I'm seriously considering going for one of these, and then seeing if I can find a way (through upgrading the units, etc) to make the numbers make sense. 

Any and all insights would be appreciated!

[Ryan Kelly]

@Dave Kay I think your numbers may be off for the actual rents and expenses. Is this duplex significantly out of date? Is it currently under rented? What is 5% PMI (property management)? That number will be closer to 8% a month. You could have an opportunity to improve the property AND increase the rents quickly.

We purchased a duplex in south Austin in July, made some capital improvements, and increased total rents by $225 within a month. We're cash flowing approximately $700/month after all expenses except the occasional repair (if requested). I'd be happy to look over your numbers and give you some perspective if you like.