How to Analyze a Deal

Question

I'm in the process of buying my first home/house hacking and doing my first deal analysis.  I've used the tool and the 2% rule. Would appreciate some help.

I will have to occupy 1 unit within the Duplex, however, I plan to do short-term rentals on the weekends for my unit.

2017 & 2019 Renovations: New Flooring, dishwasher/fridge/ W&D, interior paint and New roof.

Kevin Pillow · Answer

First I would read this 9 year old thread about the 2% rule https://www.biggerpockets.com/... You will have a long term lease for the other unit and you will rent out your own unit for the weekends. There are about 104 weekend days out of the 365 days in a year, so if you are able to book all 104 days your occupancy rate is 104/365 = 28%. This is just an example but you can play with the number of weekend days you can get booked out. I'm going to assume the property is in Harris, County Texas so near Houston. I don't know what the seasonality for that market is but if you can figure out the average nightly rate for the year then you multiply that number by the amount of weekend days you estimate will be booked. So if the ANR aka ADR is $175 for similar properties to yours and you figure realistically you can get 95 weekend days book, then the math is $175 (ANR) x 95 (days booked) = $16,625 in gross revenue. That doesn't include the additional revenue from the cleaning fees you decide to charge. This is just one of many methods you can use to start getting some numbers for revenues. After you get your operating expenses and debt/insurance/taxes figured out you can subtract the sum of those amounts to get your projected cash flow. I would love to see what people think of this so please feel free to throw spears. Good luck and I hope this helps!