Need help analyzing this deal!

[Tim Yang]

I am trying to implement the house hacking strategy here so there is this condominium.

Asking price $115,000

3 BR 2 Bath

1008 sq ft

Here are my expenses that I've accounted for when analyzing it with an FHA loan 3.0% interest fixed 30 yr, 3.5% down financing.

Vacancy 5% $82.50, Cap Ex 5% $82.50 (HOA would cover most exterior repairs), HOA $312, Property Taxes $31.42, Repair allowance $165, electricity $75, P&I $467.88, Heat $45,

Everything else is covered by HOAs like insurance, sewer/water,etc.  

So total monthly expenses came out to be $1261.29.

I think for Aurora CO area, it's a bit cheaper rent in the area, but I think I'd be able to get at least $500 in rent per room.  So if that is the case then my cash flow would be roughly $300.  

What do you guys think?  Is there anything I'm missing?  Or what do you think I'd be able to charge for condominium rent?  I generally see at least $500 for rent in aurora area.  Is this a good enough deal for house hacking?

[Nathan Seltzer]

@Tim Yang You need to check with the HOA about leasing individual rooms. Many forbid it. It may seem stupid to you but the HOA literally has complete discretion and they can change the rules at any time.

What Sue Kelly was talking about is simply that the money you use to buy a condo has to come from somewhere. If you want to get creative with financing, then you're talking about hard money lenders, partner investors, second mortgages, master leases and seller financing. You don't just go out and get a 0 down mortgage at your local bank. Them days is done. You mentioned that book from BP. Read it!

I won't comment on whether or not condos are a good investment, because I am totally inexperienced, but your plan to rent out individual rooms with shared living spaces is typically only  acceptable to certain tenants, like college students. Not sure that will work in Aurora, and I'm not sure that's who you want as roommates. 

You sound impatient to get started. That drive to get moving is good, but it can get you in trouble if you don't exercise temperance. My wife and I talked about duplexes and researched the market for over a year before putting in an offer. Don't buy a property without knowing more about the potential positives and negatives. 

If you can afford a condo, you can afford a multiplex (or nearly so). No one said it had to be a 10 unit apartment building. Find a distressed duplex. If there aren't any deals that make sense within your striking range then take Sue's advice: save and wait.