First Duplex. My numbers aren't 2%. Owner-occupied - Seattle area

[Matthew Richey]

I'm about to put my offer in for a my first real estate investment.

In Auburn, WA which is about 40 minutes outside of Seattle,WA

 Listing price was 330k and dropped $5,000 about every 6 days which is now $315k I'm about to make an offer at 250k comparables in the area have sold $235k to $265k

The tax appraisal is 281k

Total square footage is 4200 and its a duplex 2100 square feet is on the top floor and then in the basement has a family room and unfinished portion.

I would be living on one side  or possibly making the basement into a another unit for owner-occupied

Offer price $250k with 25k down at 3.6% interest rate

Current rent that's collected $1930

Operating expenses including 10% for repairs garbage, sewer, insurance property tax is $745

Mortgage $1007

Mortgage insurance $111

 that would be a .37% for the 2% rule

I was thinking I could possibly raise rent possibly $1100 and then if I was able to make that apartment get those numbers better.

No other offers on the property currently has bad curb appeal

 Any advice would be much appreciated as I'm wanting to jump into real estate but don't want to make a huge mistake.

[Alex Chin]

Hey @Matthew Richey. Without getting into any deep analysis, I would say the first thing you need to remember is that if you're going to be owner-occupying the property as a househack, your equation changes entirely. The goal is not to generate some kind of massive monthly cash-flow, you are looking to defray your living expenses while gaining valuable hands-on management experience and building equity in a property with a very low interest rate.

Don't start evaluating this property based on the 2% rule, 1% rule, or whatever. Instead, look at it from the perspective of: "Well, I need to live somewhere, and it may as well be "free" to me so that I don't have $1,000+ going into someone's pocket ever month." Treat extra cash as a bonus on this property. If you can finish the basement and get a studio apartment out it, so much the better (make sure that this is permitted first!). My instinct is to advise holding rents slightly under-market as your priority in this situation is to minimize vacancies so as to reduce your personal operating costs.