House hacking

[Adam Benenati]

BP members,  those of you who have house hacked what was your experience like? I am currently looking for a duplex. Live in one side rent the other. Often I here people say this is a great way to live for free or close to it. Unfortunately in my area it is nearly impossible to live for free. Then rent will pretty much cover the mortgage. However after all expenses it is not living for free or even close to it. I have found deals from 500 to almost a 1k a month that I would still have to pay. I am including all expenses capex, water, sewer etc...However once both units are rented it cash flows nicely. I am just curious to how many others have ran into this situation? Would you be ok with still spending that much each month even while house hacking? Would you consider this still a deal? 

[Chris Gibbs]

I am in the process of acquiring a triplex right now. I am setting it up with FHA financing and will be living in one of the units. Basically how I calculated it was with me being a regular rentor. I will need to pay rent just like a tenant would into the expense account. However I can deduct the money I calculated for property management and any excess cash flow from the property. Here is the break down for my deal.

Purchase price: 380,000

mortgage including tax/pmi/insurance $2245/m

rent is $1000/m per unit.

Tenants in 2 units pay $2000 in rent 

and I pay 1000 in rent to the expense account.

-300 for property management

-300 cash-flow

I pay 400 into the expense account to keep the property breaking even (but I will probably just pay the whole amount to build it faster).

Once I move out the property will cash flow by itself without me.

hope this helps I can answer any extra questions you have but this will be my first deal so I cannot offer as much knowledge as some other more experienced investors here on BP.