Deal Analysis Help please...use FHA/buy or rent for 1 year?

[Nicholas Morgan]

Hello everyone. 

I'm entertaining putting an offer in on a 1 bedroom/1bathroom duplex. Here are the numbers:

LP: 115k 

Current rent: $600

I think I can get $700 at max. Realistically, probably $650

I pay water, so budgeted $80/month

Insurance will be $65/month

Property taxes: $190/month

I plan to house hack and use an FHA loan, so PMI would be $82/month

Vacancy: 8% of rent

CapEx: 7%

Maitenance: 7%

With those numbers and current rental amounts, the property is not profitable when I move out. 

At a purchase price of 100k, the property breaks even and since I don't have management factored in, I'll have to manage forever. 

Since I'll live in a unit, at a purchase price of 100k and current rent of $600 for second unit, I'll pay ~$465/month to cover expenses and set aside $120 to cover Vacancy, CapEx, and maintenance.

I don't suspect they will accept an offer like 100k, but who knows. 

However, at that price does it make more sense for me to rent somewhere? i'm getting married at the end of October and I quickly need to find somewhere to live. If I could rent an apartment for $600/month for a year while I keep looking, should I? I could continue saving up cash for a down payment in the future. I also wouldn't be responsible for issues like CapEx. Also, I wouldn't use up my FHA loan if I rent and can use that option for a different property in the future. I need to find somewhere quickly as the wedding is coming up, but I don't want to rush into a poor business move just because of this timeline I'm on. I'd love to not have to sign a lease, but maybe it's the best option? There's not a whole lot of properties that are in the locations I'm interested in and time is running out. Any advice on what to do? This property certainly isn't a homerun, but if I can get for $100k and bump the rents to $700, then I'd make ~$175/month positive cash flow once I move out (after sitting aside 22% for Vacancy, CapEx, and Maintenance). Which is nice.

Thanks in advance,

Nicholas