Derry Condex (House Hack)

[Robert Leonard]

Investment Info:

Single-family residence buy & hold investment in Derry.

Purchase price: $155,600

Cash invested: $15,000 (down payment and closing costs) + $5,000 (repairs, fencing, etc.)

House hacking

[Chace Fraser]

Hey @Aditya Maini 

If you are using a low down payment, its not really realistic to expect to be cash flow positive. When an investor is looking at being cash flow positive, they are typically putting down 20-25%. If you are in a high demand metro area, it's simply not realistic to expect to be cash flow positive if you are putting down 3-10%.

Now if that is all the capital you have, that is what it is....is it better to keep renting than to buy? Typically it is better to buy. Better to build your own equity through the debt pay down, enjoy the tax benefits of ownership, and garner the equity of an appreciating asset. You just can't expect to cash flow on an initial purchase with a low down payment. Now with time and rent growth, what could be a negative cash flow property might very well become a cash flow king, but that takes patience.