Multifamily or single family as first investment?

[Kevin Nieves]

In my current property I pay $840 mortgage. I wanted to purchase a Multifamily for 425k and house hack. I was thinking, if I get the Multifamily in that price range I will be paying a mortgage of at least 1500+ for one side of the units which would have me way over what I pay in my current property. I know that I won’t be staying in that multifamily forever, because I will be building my portfolio, but that’s double what I pay now. I don’t mind paying close to what I pay currently on my mortgage. But going from 840 to 1500+ doesn’t seem like a smart move. How can I analyze a multifamily and make sure I’m cash flowing with me living in one of the units? Or how can I ensure that the property will cash flow once I move out? Should I invest in a single family to start with? Please help. 

[Tyler Munroe]

I think analyzing a house hack is more subjective since you'll actually be living there. I've only lived in house hacks for the last 10 years and currently pay $1,250 to live in an apartment that would rent for $4K. Point being that a lot of people say you should live for free, but if that's not possible just aim for the best value based on the mortgage payment vs. rent value. You can then look at it as saving that difference (ex. in my case saving 2,750/month). Add to those savings the equity you build by having your mortgage partially paid down by someone else and you'll be way ahead of any renter or single family owner.