HOUSEHACKING! New baby & job changes on the way

[Ben Peterson]

Hi everyone! I'm 26 years old my wife is 29. We have been travel nursing for the last 2 years and have a pretty great cash pile to get started in RE. We were planning on traveling longer, BUT, just found out we're expecting!! Odds are we will need to reel in our wander lust and settle back down where it all started in Akron, OH. This also means we'll be taking huge pay cuts. 

My main goal for us is to find a 2-4 unit (preferably turnkey) and live in one side for a year or so before refinancing and scaling. An issue I am running into in my market though is high listing prices and lower rents not meeting the 1% rule. Those that do meet the 1% rule are value adds that will need more work than I can put in right now. I almost bought one for $220k but realized that particular neighborhood was saturated with vacant units up for rent WAY below what I would need to cash flow (even after rehab). 

I found another more updated duplex in a great area. It is listed for $285,000 and one side is already renting for $1,100 until 2024. Newly renovated; turnkey, double garages etc. If we live on one side we will still be paying $835/mo plus utilities! This seems like a lot for house hacking? Is the asking price outrageous, is the rent too low, or are these situations the new normal??

Thanks!

Cliffs:

-Travel nurses; lots of cash

-Found out we're pregnant! Gotta settle down

-Househacking seems like the best move. Place to live + offset mortgage.

-Having trouble finding properties near me that cash flow/offset mortgage. i.e. still paying 1/2 PITI

-Am I finding bad deals or am I being too picky?

[Billy Daniel]

The 1% rule is slowly becoming archaic.  It's not impossible, but it is very difficult to find properties that meet it.  

As for finding a property, make sure the property cash flows with all units rented (i.e. after you leave).  This is key.  A house hack isn't necessarily about having no mortgage payment, just a reduced one.  Another important thing to remember is that list prices are suggestions, not rules.  If they are wanting $285k, but the numbers only work at $250k, write the offer for $250k and see what happens.  Don't just throw out low ball offers to see what sticks though.  Run your analysis and do what makes sense for you!

Good luck!