Moved out of my first house hack.

[Sean Tagge]

Hello BP nation. 

Here is my little 18 month story of how I successfully integrated the "house hacking" strategy in Salt Lake City UT. 

Start: August 2015 Bought my first home which is a duplex that I "house hacked" (aka I lived in one unit and rented out the other unit). This allowed me to get a lower interest rate on the property and less money down (aka increase in ROI).

Numbers when I purchased the property. 

Purchase price $250,000

Down payment (10%) $25k

PITI $1315/mo

The unit I lived in need some cosmetic repairs which I fixed while living in the unit (around $6k in total repairs). 

The other unit was rented at $900/mo month to month lease. I realized that this rent was low so when I owned the property I increased the tenants rent to $1150/mo they were fine with this since that is what the market rent really was. 

So as I have been living in the property from 8/2015 to 1/2017 I was paying a mortgage of $1315 and collecting rent of $1150 = a negative $165/mo to pay the mortgage. Then over the past 18 months I averaged an additional $350/mo in expenses such as paying utilities, repairs, ect. ect. 

So an average negative $515/mo cashflow (not bad considering if I bought Single family house like most of my friends (aka consumers not investors) were doing I would be paying $1315/mo plus utilities and repairs). 

Anyways now I got a new job in Memphis TN so I just moved there to work full time in Real Estate. 

So I listed the side on the duplex that I was living in for $1035/mo and just got a tenant in 2 weeks ago. 

So now I am at gross income of $2185/mo - expenses of ($1315 + $350)  $1665 = $520/mo net cashflow!

Not bad at all. 

That would put me at an annualized $6,240 / $25,000 = 24.96% cash on cash return!! If things pan out like they did last year. (just a rough estimated ballpark numbers but you get the idea.) 

Now Factoring in the appreciation which I believe the property is now worth $300,000+ this deal doesn't seem too shabby. 

Now I am searching for my next house hack/live in flip in Memphis!

[Sung Park]

What about cap ex, vacancy, and property management? Is the $350 including those expenses too?