Should I go in knowing it’s negative cash flow?

[Simon Obas]

Planning on purchasing a triplex. There are two tenants already living in the house. Market rent should be $1000 per unit but one tenant pays $650 (and is month to month). The other pays $800 and signed a 2 year contract that expires January 2021. Mortgage will be $2300 (insurance price is included).

I plan on house hacking but I have to honor the tenant’s rental contract. I will raise the other tenant’s rent to $1000 ASAP. I am looking to get my first deal and stop paying rent ($1905 a month). Would this purchase be a bad deal knowing that I would have to come out of pocket $500 hundred dollars a month— and then raise the rent on the other tenant as soon as her contract expires? I plan on living there for a year and then will buy another home and house hack again. Please let me know your thoughts.

[Jay Hinrichs]

Originally posted by @Simon Obas:

Planning on purchasing a triplex. There are two tenants already living in the house. Market rent should be $1000 per unit but one tenant pays $650 (and is month to month). The other pays $800 and signed a 2 year contract that expires January 2021. Mortgage will be $2300 (insurance price is included).

I plan on house hacking but I have to honor the tenant’s rental contract. I will raise the other tenant’s rent to $1000 ASAP. I am looking to get my first deal and stop paying rent ($1905 a month). Would this purchase be a bad deal knowing that I would have to come out of pocket $500 hundred dollars a month— and then raise the rent on the other tenant as soon as her contract expires? I plan on living there for a year and then will buy another home and house hack again. Please let me know your thoughts.

 if your exchanging renting with owning and your exchanging 1900 dollar rent for 500.  can see how that is a bad deal.