House Hack Duplex/FHA Loan

[Justin Ruholl]

Hello. My friend and I are thinking about buying an duplex using an FHA loan or a FHA 203(K) loan. He has 10,000 dollars that he wants to invest, and he's decided to partner with me. We are going to open a joint account and put the 10,000 dollars in there, and I am going to live in the duplex so we can qualify for the loan(This is my second investment property, I'm only 18 years old).

Property Details:

Built: 1900

1st unit- newely redone 1 bed/1 bath (one story), currently has a tenant living in it for 750 dollars/month.

2nd unit- 1 bed/1 bath ( two story) walls are finished and painted, still needs flooring, cabinets installed, bathroom finished, closet finished. 

Cap Ex: Roof needs redone, and electrical and wiring has newly been done.  

FINANCIALS:

Asking price: 120,000

Down-payment- 4,200(3.5%)

Closing Costs- 2,400(.02%)

(Pre-Stabilization) 1st Year/When I'm living in one unit.

Rent: $750/month

Expenses(Monthly): 

Mortgage:$553

Taxes:$65

Insurance:$130

Total Cashflow:$2/month

Stabilized Report(After I've moved out, and both sides are rented.

Rent:$1500/month

Expenses:

Mortgage:$553

Taxes:$65

Insurance:$130

Cap Ex:$150(10%)

Repairs:$150(10%)

Vacancy:$75(5%)

Cashflow:$377/month

COC ROI: 68.57%

Cap Rate:9.30%

Question: Is this a good investment?

Question: If roof needs replaced, should I use a FHA 203(K) Loan to wrap that cost into it?

Notes: Most of the things that need finished in the second unit, are already supplied in the unit, they just need installed.