What numbers make a good multifamily house hack in LA?

[Devon Yates]

I am still looking a multifamily unit to house hack here in LA (Long Beach, San Pedro) and was wondering what some of you determine to be a "good" house hack in an appreciation market like this.  For me, one criteria I am trying to enforce is that I want to at lease break even (including all expenses) when I move out.  Meaning, I want the fully rented property to cover my mortgage, utilities, property management, etc.  The second is, the effective mortgage while I am house hacking the property should be less than or equal to rent for an equivalent unit. 

[Rick Albert]

On both of my house hacks, I wanted to at least break even on my hard costs after I moved out. I put 10% down for the first one and 3.5% down on the second one (technically $0 down since I used the HELOC of the first one). However, both properties were fixers, which gave me that wiggle room on the rents. Keep in mind if the numbers work going 3.5% down, why wouldn't someone putting 20% buy it? We have to be realistic in this market.

There are a few other ways to look at it and what I tell my clients:

1. You have to have a place to live regardless, so how does it compare to what you are paying now in rent? For example, you might be paying $1,500 out of pocket, but you would be paying $1,500 in rent where you don't get the tax write offs, equity gains, etc.

2. Could this be a potential live in flip? Having multiple exit strategies puts you at an advantage.

3. Could this be a vessel for future investments? For example, I just got a HELOC on my current house hack and will be buying out of state. I don't have to move and I'm leveraging the property.

Both are good locations. If you are going towards MFU, I would consider Long Beach to avoid LA rent control. Just my two cents.