Newbie questions for house hacking with family

[Nathan Marden]

Am I too nervous about my first deal or being smart?

I have been working with a realtor for 6 months with multiple offers, one accepted but I didn’t have the resources for such a big rehab so had to walk away

Currently have opportunity for a 2/2 duplex that is listed for 270 and 1100 sq feet per unit My realtor suggested offering 290. Rents for the current tenant is 650 but the market in this neighborhood are around 1000

I’m planning to have this first rental be a house hack with my family of 5...with possibility of using the brrr method but I’m worried because 290 will be the most expensive home in the neighborhood there will be no way for more equity to go higher within 2 years any suggestions?

[Marcus Auerbach]

@Nathan Marden a common issue these days. As long as you have an appraisal contingency in the offer, you bank will not let you overpay. I am writing more and more offers in Milwaukee now where the seller is countering out the appraisal contingency from the offer. If the appraisal comes in short, the buyer will have to come up with the cash to close the gap, potentially a tens of thousands. And we all have seen redicolous appraisals. I have seen that in CA for a while, but it's pretty new for us here.

On the other hand you have to be realistic. You can only buy the best deal possible in 2019. Sounds like you have been looking for a while, so you should have a pretty good feel for what is possible. One mistake a lot of nebies make is they buy a house that is 20k cheaper and will need 40k of upgrades and they think they can do it over time. They are pretty much lying to themsleves, because you still have to do it and now you have to pay cash instead of a 30 year mortgage. So, it may not be a bad deal, just because the price is high. Remember price is what you pay, value is what you receive - so if the condition is good, it might be worth it.