I have recently started diving into the idea of house hacking to start my career in real estate so bear with me...
I have no actually plan yet as I'm still learning but I'm gonna run down an idea I have in hopes to gain some knowledge.
I found a duplex priced at $550k that appears in good living condition. I calculated a $4800 monthly payment on a 15 year term after 10% down. My plan would be to live there for a year with a roommate in my half and rent out the other other half. Conservatively thinking this would leave me with around $2k-$2.5k a month in payment. After a year I would move out and rent both units out while living with my parents. (This is the part that Im not sure is dumb or not) For two years while I'm living at home rent free, if I'm able to charge $2.1k each unit for rent, I would be left to pay $600 out of pocket to cover monthly payments. After 3 years total I would refinance for another 15 year plan and my mortgage would go down to $3600 and I would start getting $600 cash flow.
Everything here was calculated online using mortgage calculators ect so obviously not exact. I used an interest rate of 6.7 for the calculations. I'm looking to start this with between $75k-$100k (inlcuding $55k down) to account for maintenance ect.
Let me know if this is a smart or stupid idea. I'm lucky enough to be able to live with my parents rent free and with investing $600 into the property for 2 years after the initial year of ownership, I would end up saving around $30k. After 3 years I would have a total of around $100k equity in the property and then the cash flow would begin.
I know CA can be tough but this is all calculated with the idea that none of my tenants would cause me troubles with stopping rent pay.
I'm wondering if it would be smarter to save up for 20% down to speed things up but this will take me longer to get started
Let me know what you think, any advice is very appreciated. Please enlighten me on anything I have missed/forgotten to take into account, thanks!
