[Calc Review] House Hack

[Kenneth Foster]

Hello BP Team,

Earlier this year a colleague of mine opened up my eyes to the power of real estate investing. Due to being a complete novice on the topic; I have spent the last few months reading books, attending webinars, and countless hours of driving while listening to podcast. I have finally decided to take off the training wheels and pursue my first deal.

Property:

3 units

(1) 2 bedroom, 1 bath

(2) 1 bedroom, 1 bath

- All units currently rented on a month to month basis

The attached calculation is based on year 2 after I move out of a unit. Year 1 numbers can be found below. 

Monthly Cash flow: $110.51

COC ROI: 9.86%

2% Rule; 0.74%

I would need to find a partner on this deal to cover the additional capital I do not have. Would these numbers be attractive for a partnership? Is my analysis totally wrong? Any and all feedback is welcomed and I thank you for your time so far. 

View report

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

[Chace Fraser]

@Kenneth Foster I've heard of people putting in the mgmt fee and taking it out. I would recommend managing it yourself while you can handle it but keeping the line item of a management fee in place. If I remember correctly Brandon Turner recommends leaving it in... that way you can make sure it still cash flows after you move out and if/when you decide to hire a property manager. In the meantime you can just stack that extra cash!