House Hack Analysis: Is this a good option or is it overpriced?

[Dillon Beard]

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*This link comes directly from our calculators, based on information input by the member who posted.

Me and my wife are looking to house hack in order to get into our first investment. I have been racking my brains out, because the numbers tell me this isn't a good idea; I just want to get a second, third and fourth opinion. Let me know what you think. I didn't put in appreciation numbers even though my market has not seen negative appreciation in over 20 years. i just don't think they are to be trusted. Thanks for taking the time. Kennewick, Pasco, Richland, Central WA, tri-cities,

[Curtis Rouse Jr]

@Dillon Beard I did a quick analysis on this deal through the financial model I built and this would be a horrible investment as you have already seen from your analysis and mine below. Simply put, there isn't enough income coming in from this property that would yield a positive cashflow even with all 4 units being rented out. This is the problem with these smaller deals because just like in any business is comes back to sales or in our case, rental income. That's why I personally invest in the larger apartment deals because of the economies of scale although this is not for everyone and you should invest according to "your" specific financial goals. I have plugged in your numbers and added some other parameters to the analysis. I have only shown years 1 - 3 for simplistic purposes, but have model built out for 30 year projections.

Assumptions

Downpayment: 20%

Closing Costs: 3%

Amortization: 30 yrs

Int Rate: 5%

Material: 8% of gross (plugged)

Misc: Added the PMI to roll up here on the P&L

Vacancy: 10%

* I hope this helps and makes sense. This is a sample and part of the full analysis that I do when preparing executive summaries for raising private money, so if you need more detail than what's provided just let me know. Please let me know if I can be of any additional assistance or if you have another deal I can help you analyze! The BP community has tremendously helped ignite building my portfolio so I love giving back. Best of Luck!