House Hack in St. Louis

[Jacob Murry]

Hi Everyone, 

My wife and I are set to close on our first property next month (barring everything goes well with inspection), so I suppose this is more of a reactive analysis request.. Affirmation or regret - right? :) 

Quick back story: This is our first property, we just recently married in April and we've been renting @ $765/mo in the city for the last 3 years. Since this is our first property we wanted to buy something that was more turn key and would require less work and maintenance since we are pretty new to the game. 

Asking price: 319k 

Accepted offer 319k with 7k in concessions for closing.

Financing: Traditional loan with a mortgage broker 5% down 95% LTV.

Interest rate 5% 

PITI - $2086

Total cash out of pocket (down payment + our portion of closing est.) $17,000 +-

Tenants will pay gas and electric and we will pay water/sewer and trash. These expenses should be about $150/mo. 

Current rental income as is, is $2245. Two of the units are currently rented under value so there is potential to eventually bring it up to $2300. 

Our primary goal here for our first purchase was to house hack and eliminate our rent and some utility expenses and we feel like we've got that with this property. The house was a gut job 8 years ago and it's currently in great shape, it's in a great neighborhood in the city and all units are in great shape and recently renovated. We know that this isn't going to be a home run from a cash flow point while we're living here; however, it should help us save about $800/ month extra so that we can buy our first non owner-occupied investment property in the next 6 months or so. 

We plan to live here for 12-18 months (as we have to for the loan) and then move on to another house hack either in St. Louis, or back to Dallas where we have family (and do the same thing there.) 

When the property is completely rented out the numbers should be as followed : 

Rental income: $3150

Property Management: $150 - Low, I know. 

Repairs: 5%

CapEx: 5%

Water/Sewer: $150

Trash: $15

Vacancy: 5% 

PITI: Still $2086

We should be able to cash flow $300-$500/month after we move out and rent this property out. If we're still in STL we'll manage it ourself, otherwise we have a property manager we will use. Since we're getting in at such a low down payment I'm showing a CoC return of about 30%.. For a first property and trying to play it fairly conservative I think we've got a good deal here. I'd be interested to hear others analysis - if it's soul crushing, I just ask you do it with an emoji at the end :).