My First Duplex...How are these numbers

[Jacob Wright]

Hello BiggerPockets, 

My name is Jacob Wright and I am currently in my last year of Business School. I have been looking around the site for awhile and have been looking really hard for my first duplex to purchase. I would really like to 'House-Hack' the residence.

I have found a duplex that seems to be a very nice home and is currently occupied. However, I believe the asking price might be a bit steep.

After following the deal analysis article on the site, I have came up with a Cash Flow of only $1032/year if i were to rent out both sides. Is this around normal Cash flow rates for a Duplex? The home sold for $175k in 2005 and is selling for the same amount now due to the owner moving out of state. I was looking to offer $160k and apply for an FHA loan for purchase. The home has been remodeled therefore my rehab cost is low. I also figured up a cap rate of only 6.8%, how is this?

Here is a quick spreadsheet I typed up, how do my numbers look?

http://imgur.com/HYvM3Bp

Thanks in advance and look forward to hearing what everyone says.

[Hunter L.]

Jacob, I'm in business school as well. I have some questions for you regarding the property.

1. What is your goal regarding your "house-hack"? Do you want to live for free? Generate positive cash flow? Or just reduce the cost of living?

2. You said your rehab costs are low. Are those costs incorporated into the projections on your spreadsheet?

3. How did you come up with your maintenance and repairs expense?

Initially it seems like the deal may be a little tight with respect to the cash flow of just $43/door per month. And that is if you were to rent out both units, which would not qualify the property as "owner-occupied".