House Hack Opportunity?

[Roy Gamiz]

Fellow Investors,

My wife and I are trying to pick up our investing this year and we have decided to house hack if we can find a good deal in our area. We'd like to house hack for a couple of years then repeat. The following opportunity has come up:

4 Contiguous townhomes: Total sqft 8,965

Asking Price: $618K

Rental Income: $5,475 Monthly

Expenses: 

Property Taxes - $8,146 Yearly/$702 Monthly

Insurance ~ $4,200 Yearly/$350 Monthly

HOA - $548 Monthly

*Property Management - 10% $548

*Maint - 5% $274

*CapEx - 5% $274

*Vacancy - 5% $274

The expenses listed above total $2,970 leaving $2,505 to service the debt just to break even which means I'd have to put 25% down to just break even (at FMV).

I have several other variables that can be incorporated. 1) I'm a veteran and would be eligible for $0 down on $424K of the loan. 2) We could exclude the property management fee since we will be managing but I always hear in the podcasts that it's best to include it in the analysis. 3) We would be selling our existing house to tap into the $100K+ of equity for the down payment. 4) We have a current monthly payment of $1,670 on our existing home. 5) We would not be purchasing at market value for this property since the numbers do not look that great above. 6) We have $50K of liquid funds to serve as reserves. 7) We also have additional funds in our IRA's that we can tap into if needed (yes, this brings up a whole slew of other issues which aren't meant for this forum).

Based on all of the above, if I lived in one of the units I would still be paying into the mortgage but not the $1,670 that I pay now. We would be saving around $1,200 which can be saved up to apply to future endeavors. We would also have the other 3 tenants helping us pay down the mortgage. 

For those house hackers out there, what other things should I consider? 

The numbers seem kind of tight in my scenario above, what asking price should I be comfortable with to make the numbers work?

Is decreasing my monthly mortgage payment by house hacking worth the risk above?

This is a long post so thanks for reading and providing feedback to a fairly new investor.