Quote from @Taz Zettergren:
@Nicholas Betancourt welcome to the forums and congrats on the first post! First off, as a whole single family homes weren't made to cash flow but after 08-09 happened it allowed them to be much more favorable and we are still benefiting from that. How far in the negatives are you and what kind of adjustments are you using in your calculations? For a house hack with a first time buyer most will use a fha loan which allows for a 3.5-5% down payment. With that little down it's going to be challenging for anything to cash flow once you move out and rent your space but that's not what it's all about, the equity growth is far more valuable than the little bit of cash flow people would like to see. As long as you aren't too deep into the negatives, with the house hack you'd be living in a property at a very small initial investment (compared to 25%) down while having a reduced mortgage payment as you gain equity in the home, and in TX it'll be quite a bit more than most other states in the US. As long as you're in a good location where you see the rents and values continuing to go up over time it'll be a homerun in 10-20 years if/when you decide to sell or refinance. Remember in real estate it's about the long game, being a generational wealth builder, not so much the immediate cash flow. That'll grow over time as rents increase but you will only see true cash flow when the mortgage is paid off and you own the thing free and clear.
Hope this helps, best of luck investing!
Thank you very much for the insight! To provide some context,I plan on using a conventional loan and put down 5% (That way PMI goes away). To be honest I realized yesterday that when doing my calculations I made a mistake; since I'm buying the duplex as a primary and I must live in it for a year, therefore I'll have to pay utilities. But after I leave and rent out both units, I don't have to pay for utilities as the tenants will pay for them.
I was calculating the numbers on the rental property as if I was renting both units out but still paying for utilities. This error in my calculation diminished my potential cash flow for year 1 and putting me in the negatives. Once again, thank you for responding and providing great advice!
