What do you think about this deal, go for it or dump it

[Amer Swid]

So, you found an 1880 multiunit house and a single-family house both attached to each other, both owned by a church that put them up for sale. You made an offer for both properties for $300k, then the inspection revealed lots of issues needing attention, though not major ones, so you offered $280k asking for a reduction in price. One apartment in the multiunit house is rented, and you plan to move into the other one to qualify for a better interest rate and lower down payment (25% vs. 5%). The rent from the single-family house and the rented apartment in the multiunit house totals around $1,950, and you'll be living in the other apartment (but let's assume it could also be rented for $900), making the total potential rental income $2,850. The mortgage will be around $1,900, and repairs, let's say, $100 a month. The total down payment with closing costs will be around $50k, and then add $10k for renovations, so out-of-pocket expenses will be around $60k. Do you think this is a good investment choice? By the way, the rent has the potential to increase in the future.

[Alecia Loveless]

@Amer Swid The whole point of a house hack is to cover some or all of your living expenses. Without knowing any of the additional expenses this seems to meet the basic requirements.

The down payment you will eventually get back and the money for the repairs presumably over time you will recover as well.

If you have the other expenses, such as the property taxes, water and sewer bills, heating bills if the landlord is responsible for those, electric bills if there is a landlord account, and any other bills you as the landlord would be responsible for monthly you can total them up and see if they will be more or less than the $900/month rent your apartment will generate once you eventually move out of it.

It might also be possible that while you are living there you can upgrade your unit some to where it could generate a higher rent when you move out.

If the property positively cash flows even a little bit or close to it where once rents go up over time with all three rents and all the expenses then I’d say go for it.

If it’s at a big negative loss I would look for another deal.