First House Hack Duplex w/VA Loan

[Michael B.]

Help me with my first house hack, please!

1988 Duplex, 3BR/1.5BA Aprox 1050 sqft /unit, Both Rented $1050 (1)1yr/(1)Mon2Mon, Utilities Separate, Offer $350k, VA Fund Fee 1.4% financed, 2.65% rate, 10% down

Cost Assumptions
Purchase Price $350,000
Land Value (25%) $87,500
Building Value (75%) $262,500
Improvements $0
Closing Costs $10,500 / Funding Fee $4,900 (8,050 @0% down)
Total Cost $365,400

Financing Assumptions
Downpayment 10.00% (0% possible with 2.3% funding fee)
Finance Amt $354,900
Downpayment Amt $35,000
Interest Rate 2.65%
Mortgage (Years) 30
Mortgage Payment $1,430
Cash Outlay $45,500

Revenue Assumptions
Monthly Rent $2,475 ($1050 for the unit with 1yr lease/$1325 est. for owner occ unit, based on lowest est. of Zillow/Rentometer)
Vacancy Rate 8.00%

Expenses
Property Taxes Annual 1,997
Insurance Annual 1,200
Maintenance & Repairs Annual 1,616
Variable Cost PM (% Income) 10% 2,732
Capex Annual 1,616
Lawn Care Monthly 20
Total Expenses Annual 9,401

Net Operating Income (NOI) 17,923

CF & ROI (Outsourced Propert Manag.)
Annual Cash Flow $1,001
Cash ROI 2.20%
Total ROI 19.46%

CF & ROI (Doing My Own PM)
Annual Cash Flow $3,494
Cash ROI 7.68%
Total ROI 24.93%

*Based on both units being rented, understanding that owner-occupancy will affect these numbers.

Description
Built in 1988, duplex, each apt at 1050 sq. ft. 3 bed, 1 bath up - L/R, EIK, rear room with W/D hookup and half-bath down. Both units renovated, ceramic tile, carpet. Water, elect separately metered and paid by tenant. Heat pumps. Parking space 1 per unit.
Plenty of in front of off-street parking. 100% leased. Current long term tenants. Owner-managed. Located in the Lake Smith area of Virginia Beach, 1 block to the lake for boating/fishing, 2 miles JEB Little Creek, Chick’s Beach, and Haygood Shopping centers.

Concern is the opportunity cost of being tied up in this property for 1 year before I am able to purchase another house hack and potentially missing a tri or quadplex (fourplex) deal. Also, both units are currently rented to low-income housing program tenants.

[Erick Pinzon]

VB native here. The numbers look pretty accurate. Not sure if you're going to be mowing the lawn yourself as $20 seems quite low. I think your money can go a bit further in this area based on three deals I have bid on in the last month. When Quads pop up in the area they go quick but are around $300k. Hanson Ave in Norfolk went under contract last week for $305k and brought in $3000/month. Was looking at a duplex in Norfolk highlands on Hazel. Went under contract last week for ~$275k bringing in $2200/month. Yours is not a bad deal by any means but not a home run. But beggers can't be choosers in this market. Not sure if helpful but is my opinion. Good luck!