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Updated almost 7 years ago on . Most recent reply
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ANALYSIS METHOD: Standard vs. House Hack
Hello:
I wanted to get everyone's opinion on an issue - analyzing a standard deal vs. a prospective house hack.
Here is-are the hypothetical-facts:
Let's get say for the sake of this discussion, my target for a standard deal is 12% CoC return when running the numbers on a standard multifamily deal.
Let's say I currently pay $1500 a month in rent. However, I find a house hack duplex which has a $1200 per unit rent.
Now, when considering a house hack do you generally revise your analysis based on the actual savings you will see or as if the deal were standing alone?
Do you feel I should impute rent of $1500 to one side (which I would be occupying) as that is the rent plus my $300 savings, or do you think it's best just to assume the deal is $1200 x 2?
Again, I know there is no RULE, just looking for everyone's thoughts on that method.
The savings for me are real and I will realize them should I buy that deal. However, someday I will move on to the next deal and the duplex will revert back to $1200.
Clearly, the extra $300 boosts my real CoC return on that deal.
Thank you in advance for your comments.
Bob