Single parent - Should I buy this duplex and live in half?

[Chris Hanisco]

Hi everyone! I am totally new here, so I hope you'll excuse my newbie-ness.
I am located in Southern NH (about an hour north of Boston). I've been looking to buy a home for myself and my two boys. It's been very difficult to find anything in my price range, which for a single-family home is $275k. I've already lost out on a couple of fixer-uppers even though I offered above asking and little to no inspections. Also, I'm trying to stay in my sons' school district - which is rural and has little to offer for homes in my price range.

An opportunity to buy a 1985 duplex just came up. It's listed at about $325k. Each unit has 2 BR and 1 1/2 BA. It's a mirrored-floorpan townhouse style with 2 floors and walkout basement in a nice country setting. The yard is manageable for me at less than an acre. My mortgage broker says I would qualify and we will finalize a pre-approval tomorrow. I saw one side of the duplex with my realtor today and aside from some minor updating, it seemed fine. The other tenant wouldn't allow us access with several days notice, so my offer would be contingent on that and condition of the unit. (Red flag regarding that tenant not cooperating.)

I'm attaching what I got from the calculator. I treated it as if I were not living there, but technically the rents for this place should be $1600 and $1500, according to both realtors (mine and seller's realtor). Currently, the tenants are paying $1100 and $1200. I'm not sure why this is, because there is a shortage of rentals here. 

So, if I'm reading right, as investors, you all like to have the Cash on Cash ROI be over 12%, right? But if I live there, is it okay that it's just shy of 8? (I was generous with the expenses estimates.) I really just want to be able to subsidize some of my own "rent". My mortgage payment for the whole thing is estimated at $2238/mo from my mortgage broker fees worksheet.

Any thoughts would be so helpful! This is a big step for me and I'm nervous. I'm also not a numbers-whiz, but I'm trying. Do these numbers work? Thank you!

[Mark Burlison]

I personally think this a great idea. I've recommended my kids starting out like this instead of a SFH. After you build enough equity you could always go out and buy that SFH you want and rent both sides out.