Owner-occupant Cash on Cash Return

[Jesse Frageman]

Hello, I am in the process of beginning to search for a 2-3 flat in Chicago that my wife and I can live in and simultaneously rent out the other unit(s). Given we will be living in one of the units, we won’t be collecting rent from that unit and as a result, our return is cut dramatically. Should I be analyzing deals for owner-occupant homes the same way as a complete rental (~12% cash on cash, 1% rule, etc.)? Thank you for any and all help. Jesse

[Brie Schmidt]

Originally posted by @Jesse Frageman:

Hello,

I am in the process of beginning to search for a 2-3 flat in Chicago that my wife and I can live in and simultaneously rent out the other unit(s). Given we will be living in one of the units, we won’t be collecting rent from that unit and as a result, our return is cut dramatically.

Should I be analyzing deals for owner-occupant homes the same way as a complete rental (~12% cash on cash, 1% rule, etc.)?

Thank you for any and all help.

Jesse

 Run it as if you did not live there.  You want to make sure it will cash flow