How to analyze a house hack deal?

[Patrick McCann]

Hi, 

Is there any sort of calculator for a house hack deal? Rules of thumbs? Based of market analysis?

For example I'm going to look at a 2 family in Southern New Hampshire that I would plan to buy with a FHA loan. The house is listed for 419,000. The house has two 2 bedroom units and a detached garage. Lender is figuring around 7% interest. Disclosure shows one unit is currently rented for $1300 a month, seems low to me but I'm still checking comps. Seems as though I'd still be left paying a good part of the mortgage. Ideally I'd like have rent cover a good part of the mortgage but seems nearly impossible in the current market situations i my area with high property cost and high interest rates?

[Sean Delisle]

I've recently closed on two duplexes with buyers in a similar situation in Manchester NH.  Neither will be getting the entire mortgage covered, but keep in mind that when rates come down you will get a raise.  Your "Product" will dictate your rents.  So provide a nice product so you can charge a premium on rents.  

One of those buyers just listed their 2 bedroom unit for $2,000 a month and had 31 applicants.  They wanted to list it at $1600 a month and I recommended they go higher and reduce if they don't get any applicants.  Clearly, there's demand.  They made some nice improvements and now will benefit from those right from the start.  They plan to fix the unit they live in and move out in a year.  Hopefully rates will be down, so they can refi and the improvements will dictate a strong rent, so the property actually cash flows.  Definitely not impossible to make things work.  You are thinking correctly for building wealth.  Good luck!