Question on a No Money Down Househack

[Matt J.]

I've already made an offer on this property, but was curious what some others thought about it. 

I'm utilizing a VA loan to do zero down on a $600,000 duplex in one of the wealthiest suburbs of the Twin Cities. Median home price in the area is in the mid $900,000's. I'm fortunate to have a pretty high-paying job which is why we're able to qualify for a loan of this size.

3 bedroom, 2 bathroom units, rent for $2500/month each. 

While living there, we'd be paying about $500 a month with one side rented, which is a lot better than the $2062 we pay on our primary residence we'd be selling to make this happen. Once we moved out, it would be cashflowing about $1300/month, with no money down besides some repairs and closing costs. A cash on cash return of 322% is pretty hard to not want to take a risk on. 

My question is, do you think $600,000 is too much debt to take on, or does the desirable area and high rents make it worthwhile? 

[Cameron Whitehead]

One way to look at it is the more debt the better. Someone else is paying that debt down for you and when the principal goes down the equity goes up. So in 30 years or whenever the term is for you will have that massive asset on your books that someone else paid off for you essentially!