Seeking Professional advice before purchasing 2 family home

[Pedro Jean]

I am looking to buy a 2 family home so I can live in one unit and rent the other unit out. I want to get the house hacking process started so I can live rent free while I save more capital for my next investment in real estate. The area where I am looking to buy the house at, the rents aren’t that high there. A 3-bedroom apartment rent for around $1,100 per month. Since the rents are low in that area, I can find a 2 family home there under $200k in good shape. Hypothetically speaking, let’s say I buy a 2 family home in a good shape there. I rent the first unit out. The tenant will pay his/her own electric and gas bills. The rent money from the tenant will cover the entire mortgage (of course). But my question is: Since there will be no cash flow and I have to cover repairs and maintenance from my own pocket. Is that a good deal or should I look in an area where I can also get cash flow also? Anybody’s advice is greatly appreciated!

[Samuel Glantz]

@Pedro Jean anytime you can offset an expense or put cash in your pocket it's likely a good deal (within reason) Let's say you put 5% down. Mortgage payment not counting taxes and insurance is roughly $1020 per month assuming a 5% rate. Also assume you just get rent of $1000 per month. That means each year you save $12,000 in a payment due to the rent offset. Which means you get a cash on cash return of 120%. Yes it's a good deal. House hacking is about eliminating as much of the mortgage as possible not profiting on top of that. If you make money above the mortgage then right on, but it's no biggy if you don't. If you like the area and home and can see yourself there for at least 2 years then buy it.