Is This A Good House-Hack Deal?

Question

Would this duplex be a good house hack deal? The first image is with the purchase price that I am wanting. The second is using numbers from the county data with the last appraised price. My monthly payment (if house hacking) would be about $309.40 which is less then half of what I am currently paying in RENT right now. I have the capital saved up, but I am wanting a second (or third) opinion on if this deal makes sense. This would be my first deal. I am *so* ready to jump in, but I want to make sure that I do it intelligently and not just rush in and buy the first thing (I know I'll make mistakes but that's part of it).

With county data being used for the purchase price:

What the seller is asking:

Thanks!
JJ

With county data being used for the purchase price:

What the seller is asking:

Thanks!JJ

Justin Johnson · Answer

@Elijah Brown, I took last year's total taxes and added 5% (they were the same amount for the last 3 years on the assessors website).  I will be going to talk to the county assessor tomorrow to find out what the taxes are to get good solid numbers.

@Devon Keaveny, the screenshots are from BP, it's one of the calculators they offer on here.  You an use it a limited number of times for free (5 times I think?) and unlimited if you "go pro".  They are insanely helpful in calculating and playing around with numbers.

Devon Keaveny · Answer

@Justin Johnson

Sweet, thank you. I’ll definitely invest in this in the future. Well worth the small cost.

Devon Keaveny · Answer

@Justin Johnson

Sorry I don’t have much input because I am very new to this and still learning and saving money, but what website is this? It looks very helpful for running numbers.

Elijah Brown · Answer

@Justin Johnson I wouldn't just use this year's tax as the baseline. I would take the total tax this year and divide it by the assessed value to get the tax %. I would then apply this % to your purchase price. After this, I would add 5%.

Justin Johnson · Answer

@Mark Cios I have looked for quads but the ones on the market right now are either a) they are meth/crack houses or b) a little out of my price range just starting out.

@Keleisha Carter the property has recently been re-floored and renovated.  There are a few things I'd touch out (bathroom/kitchen) but they are minor things (again, this is something I will double, triple, and check again during due diligence).  There is a rather large garage in the back that I am thinking about converting into a garage apartment if zoning will allow it.  I will re-run the numbers with the PM values in place to make sure, thank you!

@Dylan H., yes, I plan to keep this as a rental after I move out.

@Elijah Brown, I grabbed the tax information off of the assessors office website and added a 5% increase to be a little more conservative on my calculations, but will definitely double check.

Thank you all for your comments and helpful suggestions.

JJ

Elijah Brown · Answer

Make sure you get the taxes right, as this can also be a surprise. I'd also factor in monthly lawn maintenance as your tenants will expect you to pay for this.

I'm pretty sure you could find a deal where you live in one room and the other tenants pay 100% of your expenses. I would offer the price you want, but if they won't take it, I'd keep looking.

Dylan H. · Answer

I would say just about any house hack is a good deal as long as you can meet or beat the 1% rule after you leave. It looks good to me as long as you plan on keeping it as a rental after you move.

Keleisha Carter · Answer

Will the property need initial repairs upon purchase? You should still budget for property management especially if you plan on leaving after 1 year

Mark Cios · Answer

Have you thought about looking into any 4 flats? You can get an FHA loan on it with 3.5% down and the additional rents would more than likely cover your entire mortgage plus give you a positive cashflow. Most importantly, your capital remains liquid so you can keep searching and finance another property shortly after. My biggest regret to date is not taking advantage of an FHA on a multi unit as my first property. Now I have a wife, kid and big dog which makes it impossible to convince my better half to move into an apartment building lol.

Corby Goade · Answer

You are the only one who can tell if this is a "good deal," as every deal is totally subjective. Will it improve your financial situation and help you achieve your long term personal and financial goals? If you think it will, then it's a good deal.

Best of luck!