Key metrics for house hacking

[Austin Robertson]

Hey everybody - Im new to this forum as well as real estate investing but have been listening to the bigger pockets podcast for several months now. I'm looking at buying a home in central coast California and ideally want to house hack. Buy a duplex and live in one of the units while renting the other out. I've been researching properties and running some numbers (NOI, Cap Rate, Cash Flow, Cash on Cash return) and find there are some properties but I don't feel confident that I'm on the right track. I wanted to get some feedback on what ya'll think I should be looking at or what I'm missing.

[Corby Goade]

House hacking is a totally different beast- as you are analyzing deals, most of those rules of thumb are meaningless because it's all about offsetting your expenses rather than calculating returns- at least at first. In reality- even if you are paying $2k in rent now, you buy a duplex and your net expenses are $2k, you are already ahead because you have equity, debt paydown and depreciation. If you can further reduce your expenses, obviously that's even better. 

Keep in mind that cap rates do not apply to residential properties with 4 or fewer units. Lots of newbies throw that number around on BP and it will give you a false sense of value and it's not a meaningful metric. 

Good luck!