Renting out primary residence to move out of state (back home)

[Brendon Botelho]

Good Morning BP,

My wife and I moved from Massachusetts to Virginia last summer for a job opportunity. We bought a house 4 months ago but just found out we are expecting. She is currently in grad school and will be unable to work as of August of this year until graduation Dec 2018.

After analyzing all of our options, we determined that the best decision, both financially and emotionally, is to move back home to have family support with the baby while house hacking a 3 or 4 family as she finishes school (my RE goals is to BRRRR properties until I can supplement my salary).

Finding a job for me is no issue as I am a Civil Engineer. The issue we are faced with is trying to sell our house without taking a loss. We could sell if for what we paid, but then would be stuck paying agent commission (we used FHA with 5% down). We are in a prime location near a Navy base (20 minutes) as well as a Navy Shipyard (5 minutes), and 30 minutes from the Virginia Beach boardwalk. The house next door is actually rented out by 3 sailors which leads me to this question, would you guys consider renting out the house in the given situation? I'm debating on asking the sailors what they pay for rent so I can have a decent idea of what I could charge, but I'm not sure if that's appropriate to ask? The houses are identical expect for the fact that ours is a lot nicer and completely rehabbed.

Here are the numbers:

Purchase price: $160,000

Mortgage: $1030 (taxes and insurance included)

Proposed rent: $1,500

Property management fees (10%): $150

Cash Flow: $320 (max) - The house was completely rehabbed when we bought it so there should not be any major expenses, but I would still plan on setting aside at least $150 for small expenses/vacancies.

My thought is this: Even if I broke even or made a hundred bucks or so a month, its better than taking a $10,000 hit, right? My best friend lives 10 minutes away and could be my "boots on the ground"/Property manager. I would plan to sell the house in 5 years. Need your advice/opinion please!!

[Brendon Botelho]

Thank you @Jonna Weber! Thank you all for the responses and the insight. It seems like the best choice based on your responses are to sell the house even if we take a loss. I didn't think about repair costs when we go to sell in 5 years. My goal is to buy and hold long term, but I would not want to hold this one as it wouldn't cash flow that great. Back in my hometown, I have been finding 3-4 families that have been cash flowing (accounting for expenses the way Brandon told us to in his book and using the calculator on here) over 200 per unit on a minimum. Keeping this house long term just wouldn't be worth it. I was just trying to figure out a way to get out of it without taking a hit but it seems like I need to just bite the bullet on this one and move on.