I could get a slightly distressed property if there is a deal since I have capital for 5-10k in renovation.

Eventually when I have saved up enough capital I would like to house hack a duplex with an FHA loan, but I'm a little confused on how the whole purchase process works.

The risk is that a great portion of your own capital gets locked up while you miss out on potential tenants.

If the answer to that question is no then the repairs that you made to the property are capitalized and depreciated once it is placed in service.

Hi Marian,A few thoughts, although I don't always advise pulling money out of your house if you cannot afford the additional cost of mortgage.Depending on availability in the area I would recommend finding a duplex/triplex that you can put 20% down on  using 100k of your capital and spending the 75K on the carrying cost and fix up.Search beyond your local area. 

The only hurdle right now is raising the capital needed (around 2 million).

Going through the process will give you protection from potential complaints by the former tenant and current tenants (ie claims of loss of personal property.) 

I also let them know via email or maybe a small gift card when I WONT be raising rates even though the power co did... gives you a chance to recoup a loss for idiots who leave taps on or don’t report a leaky toilet and also gives you a chance yo remind them you’re eating an increase that as a homeowner they would be required to pay.

I would also personally want a much higher return for my capital than 7-8%.

An investor also has protection in regards to bankruptcy, filing losses and insurance.