CoC Criteria for Duplex funded with an FHA (with PMI)

[Keegan Pieri]

Hi Everyone,

I'm looking to buy my first property by house hacking a duplex using an FHA or an FHA 203bk loan with as little as 3.5% down. Because this translates to a significant monthly PMI payment, it is hard to find deals with CoC's in the 8% plus range. However, since i'm putting such a small amount down, and my objective is to build equity over the long term (30yrs), should I be okay with CoC's in the 4% range?

My thinking is that as long as I'm safely cash flow positive and my time horizon is long-term, my focus is more on taking advantage of leverage to build equity, rather than monthly passive income. (for context I do not need passive income as my full-time job is still my main focus).
 

Thanks!

Keegan