Questions about a Duplex deal...living in one side

[Ryan Ogilvie]

Hey all,

I am new to bigger pockets. I have already listened to about half the podcasts and have been reading the forum whenever I can. It is a great site and nice to see how helpful the whole community is. 

I was lead to BP by a duplex for sale I came across and wanted to find some additional info. I have been trying to decide whether or not this is a good deal for a few weeks now and am still having some trouble. I know that there are thousands of posts on this topic and I have read many of them but I wanted to get some feedback on this specific case since it would be my first time purchasing and I don't want to make a huge mistake. From trying to run numbers using BPs calculator as well as I believe Jay Scotts excel spread sheet I found on the site it doesn't seem like it would have great cash flow but it is a home I would feel comfortable living in so I would be house hacking it and the plan would be to be able to quickly save money to invest in other properties that have better cash flow. 

The numbers I used look like this:

Asking price:260,000 

Would need about $10,000 in work 

Each unit is 3 beds 1 bath and from doing some research should rent for $1200 per month

Taxes: $580 per month

Vacancy: 8% - $2400 annual

Insurance - $1000 annual, kind of a guess house is over 100 years old

Maintenance - $2000 annual 

Utilities - $250 annual

Variable cost 12% - $3168 annual

By putting 10% down it is estimated I will have negative cashflow for the first couple years assuming I rented both units for the same $1200. 

I think the asking price is high and would like to know what you think. It is hard to comp it because it is a large house each unit is a little over 1500 SQF and one side has been completely remodeled. It is also in a nicer section of town then any other duplex on the market. From looking at it from a cash flow perspective I see it wouldn't be a great investment but I was wondering if house hacking it and having a small mortgage payment would off set that. I also feel I was somewhat conservative with my numbers.

Any input would be greatly appreciated!