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Updated over 4 years ago on . Most recent reply
![Scott Raynor's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1705540/1621514916-avatar-scottr323.jpg?twic=v1/output=image/crop=62x62@0x14/cover=128x128&v=2)
Suffering from Analysis Paralysis!!
I have long wanted to get into real estate investing and finally got up the nerve, but now I'm worried I'm paying too much. I've consulted with local real estate agents and they gave me a number of $215,000, but I'm paying $224,000 along with $6k in seller concessions for a total mortgage of $230,000.
I'm going to "house hack" and live in the one unit the first year and update appliances, floors and the bathroom. There is a tenant in the other unit who has been there 6 years and is planning to sign another year lease the end of this month which will off set my mortgage by $1100. If my math is right, I'll have a housing payment of about $800/month.
My plan is to move out after a year and rent out the refurbished unit for $1200/month. The cash flow would then be about $375 after all expenses. I'd like to then refinance and hopefully have enough to use on my next property, but that's where the purchase price comes back into play.
Am I falling victim to analysis paralysis??
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![Nate Monson's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/828687/1649954827-avatar-natemonson.jpg?twic=v1/output=image/crop=3600x3600@0x506/cover=128x128&v=2)
Hi @Scott Raynor When I am advising clients about "house hacking," my main point I try to make is to look at the difference between your current rent payment and what your projected out of pocket cost to live will be when you house hack. For you if it's $800 to live and typical market rent is $1200 then you will be creating an extra $4800 per year in savings for yourself ($1200-$800 = $400, $400 x 12 = $4800). In my market I can generally get people to be paying around 300 or less for their "rent" which works out to between 10k-12k in additional savings. So if you look at it from that perspective the longer you wait to make the leap the more money you will lose in rent.
To touch on your other point about refinancing, I wouldn't worry about that too much either. With an FHA loan with concessions, it's going to take many years to be able to capitalize on your equity anyways (unless your market hits a lot of appreciation). If it were me in your shoes I would be trying to take the savings I created from house hacking and put that into another house hacking deal as soon as you can. In my opinion that is a similar way to "capitalize on equity." Good luck man!