Is this property worth it?

[Helme M.]

I live in Portland and the market is very competitive now. I am looking for a duplex and I saw this duplex in Gresham, a city near Portland(about 25 minutes) It has new roof, new sides, almost 20k worth of work. It has a tenant on the other side already and the other unit is ready to be moved in.

Asking price is 375. I am looking for long term investment. My numbers are negative the first 3 to 4 years but then I start getting good cash flow. What do you guys think? It is an FHA with 3.5% down only, maybe that is why of my negative numbers? My agent tells me to think long term.

https://www.biggerpockets.com/calculators/shared/545686/5e8f750a-f3c0-43f8-8fce-6316474e20f8

[Wes Brand]

@Helme M. The only way you get to positive cashflow when house hacking a duplex or SFH is if you're in a depressed market. Don't buy into that market unless you believe it's going to change and raise the value of your property (appreciate).

When doing the house-hack thing, compare the cost of renting your side of the property with market rents for similar. If you're paying less than or equal to market rent you have a decent deal on your hands. It might not be the best in the world re. appreciation, but everyone has to live somewhere, and if you're stuck in a market that doesn't have great historical returns, you may as well get paid to be there. 

Oh, and one last thing: if you don't plan to live there forever, and you don't think the market itself makes a good buy-and-hold market, remember to count principle paydown and look at your profit over a long (10-20yr) time period. Depending on the appreciation / rent appreciation in your area a negative up front cashflow can turn positive very quickly. You'll want to look at the historical rates for the past 30 years at least, and pay special attention to how they drop when the market drops. Do rents drop like a stone? Do property values get cut in half? Do they fall by 10% and recover within 2 years? etc