I've been looking to do a house hack for a while as my first real estate deal. I'm 24 and have taken the last few years since I graduated college to get a job, save for my first investment property, and become lendable. I've worked at my current job for the past two years so have had steady employment and have built up some savings over the years. I'm fortunate not to have any student loans and have a stable income. Now, I'd like to put my money to work to do a house hack. Below are my financial stats:

Income: $120K/yr (gross income)

Cash: $3K

Savings: $23K

Investments: $44K

Debt: $1.8K (just credit cards, and all are paid in full on time each month)

After selling some of my investments, I'd have around $60K for a down payment. Currently, I'm looking at a triplex for $1.2M. I could potentially have my sister come in on the deal with me and be able to put down $116K total (10% down if we offer $1.16M). The monthly payment would come to around $8,870/mo (30yr at 6.646%). We could rent out one of the units for ~$2500/mo, bringing the monthly payment down to $6370/mo. Then we could split that payment equally at $3,185/mo. It's still a little steep at that price, but I'm thinking it would be a good piece of property to have for the long term, with it being in a highly desirable area in OC, with some rehab potential.

I've also heard in this real estate market, you can work with the seller to have them buy down your rate. So if we could have the seller buy down the rate 1 or 2 pts, that brings the monthly down to $8,194 (5.646%) or $7,551 (4.646%), making our payments more reasonable. There are also some potential down payment assistance programs since I'm a first-time homebuyer and other financing solutions I haven't really looked into, but does this seem like a reasonable investment opportunity? What would you do in my situation?

Also, as a comparison, it'd probably be around $1.5-2K for me to rent in the area. I know there are obvious risks with homeownership (vacancies, repairs/maintenance, capex, etc.), but I'd think it would be a better alternative to pay a little more each month to own a property and build equity rather than rent. Any advice is greatly appreciated.

Orange County, California

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