$420K duplex too much for 99K salary?

[Katriana Boncorddo]

I'm looking to purchase my first multi family property. My realtor is showing me duplexes ranging from 399-430k. There aren't many options to choose from. My plan is to use FHA, 3.5% dp, seller covers closing costs.

Gross salary: 88,992 (base w/o OT) (99,360 in July)

I work a lot of OT. Biweekly checks after tax are $4k. 

#s based on duplex I’m being shown

420,000, rate 6.25%

Mortgage payment: 3271 + 225 HOA (increase $65 starting July) =3561

Currently paying 1200 in rent + utilities.

I know you’re going to scream at me for this. Student loan payments: 1,457/month. 

[Jason Wray]

Katriana,

Normally I would ask what is the rent on the other door/unit but $420K for a Duplex is on the High side unless this duplex is on the beach or within walking distance. Regardless of that your going to pay an HOA fee on top of that? Ouch...

Here is where I ask all of my customers the big question? What do you expect to make on this once you move out? Your mortgage is almost $3600 a month which means unless you can charge over $1800 a unit per month once you move out there is no NOI. The exception would be if this was already permitted for STR - short term rentals VRBO then it might be worth it based on location.

If you just want to buy a home and have a unit to help cover the mortgage I would still insist on lower price point or NO HOA to help get the total mortgage down so that the other unit covers 50% of the overall payment.

If you plan on a long term month to month it sounds like the HOA is part of the deal killer and the second part is the price versus rents per door. I am not sure who you are using as your Realtor but I would reach out to a Anthony Wong who specializes in investment rentals or buyig the right primary that can be converted to a rental that will cash flow.

@AJ Wongundefined