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Updated over 4 years ago,

User Stats

2
Posts
1
Votes
Maria Osokina
  • Cincinnati
1
Votes |
2
Posts

House Hacking Minimum Deal Requirements

Maria Osokina
  • Cincinnati
Posted

Hello Bigger Pockets!

My wife and I are budding real estate investors, and for our first deal we're working on a house hack. We live in the Midwest where prices are reasonable, so a multifamily makes sense. We're early 30s with no kids (yet), and currently rent a 2 bedroom in a nice part of town.

We're trying to find a property that is both somewhere we would enjoy living (a comfortable size, attractive location, upscale enough to attract good tenants, etc.), and makes sense financially. These goals often seem contradictory - we either find deals that are attractive as investment properties but not to us personally, or are places we'd like to live but a pure investor wouldn't look twice at.

As we attempt to balance these goals, I'm curious what you consider the minimum necessary criteria for a house hack property to be a passable financial investment. I've identified three:

1) That the free cash flow be positive (if small) even with us occupying 1 unit

2) That the purchase price (+ rehab costs if any) be reasonable enough we could sell a few years down the road without taking a loss

3) That the free cash flow from all units (if we were to move out at some point) be worth the trouble of ownership, which we've set at $200 per month per door.

What are we forgetting? At this point we've more or less accepted that we won't find a place we really like that also meets the 2% rule and other typical pure-investment property criteria, but given it will save us the $20K+ we currently spend on rent each year we're OK with that, as long as we don't end up losing our shirt. Thoughts?

Thanks for your advice!

Aaron & Maria

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