House hack with Duplex: Deal or No Deal???

[Hieu Bui]

HOUSE HACK: DEAL OR NO DEAL????

Hey guys,

I'm about to pull the trigger on my first property. The seller has counter offer so now it's up to me to accept it or not. The place is in livable condition and only needs cosmetic rehab like repainting interior, changing doors, putting in washer/dryer.

I'll be living in one unit while renting out the other. The rent will be $700 per unit at market rate. However, current tenants are paying $500/month because they have been living there for years. The lease is on month-to-month though.

My plan:

1. Kick one tenant out, move in one unit, rehab it myself while living there to learn the job and also reduce cost.
2. After my unit is rehab, kick the tenant on the other unit out. Move in to the other unit.
3. Put new tenant in the rehabbed unit at market rate $700/month
4. Rehab the other unit.

I'll be managing the property myself, so my CoC ROI is 15.2% without PM fees. However, If I do hire a PM later on, my CoC ROI will be 10%, assuming 10% PM fees.

With the above plan, is this a deal or no deal??? I've been learning Real estate for 6 months and this is as close as getting to a deal as I've ever been!!!! I'm really nervous so any advice is highly appreciated.