First Potential Deal but Feeling Defeated

[Garrett M.]

I have been looking in a certain area for some time now and about once or twice a month a property pops up that seems much better than those that have been sitting on the market for a while. I now (think) I know what to look for but wanted to run the numbers by you guys first. Here is the best one thus far:

Some background: I currently rent today and am looking to have my first purchase/deal as an owner occupant in a triplex.

List Price $569,000

3 Units: 2 bd, 2bd, 3bd - Market rents average $1,500 and $1,800 respectively. Giving a total monthly income of $4,400

Taxes (annual): $5200

Insurance (annual): $3960

PI: 2443 + Taxes :433 + Insurance $330 (conventional)

Keep in mind that I would be living in one of the 2 bd units but I want to run these numbers as if I didnt live there.

Using the 50% rule I get the following

Conventional: $4400 - 2443 = 1957 -2200 = (243) month cash outflow

I am not sure if I should be including the taxes and insurance in this equation. This is my biggest question here on if the taxes and insurance should be calculated into the equation. Regardless of if I purchased my own place as a single family or as a duplex I would be paying for these expenses. My gut tells me that I should include them in the equation but if I do then I feel like I am never going to find a property that works well in my area - hence the 'feeling defeated'

Continuing on assuming I am not including those numbers:

Should I choose to live in one of the 2 bedrooms, I am effectively paying $1500 + 243 = $1743 to live there. This price is actually only $43 more per month than I paying now so I look at this as - (at a high level) for only $43 more per month, I can own my own home and build equity.

Thanks in advance for any guidance here.