House Hacking with large negative cashflow, can it make sense?
Hi all, I am a resident of Salt Lake City and I am going through major listing sites trying to analyze deals while I save up and increase my earning potential in order to invest in real estate in a few years. In my research I am focusing on house hacks for multifamily properties. The best listing I came across was a 4-plex for 985k with a cap rate of 5%, IRR of 10% after 20 years, and a cashflow of -1.7k a month assuming an FHA loan with 3.5% down @ 6.5% interest and rents of 1350/month. This is including the rent from the 4th unit even though I would be living there so in actuality the situation would be even worse.
I keep hearing stories on the podcast of people living in house hacks that are cashflow neutral or even positives with insane cap rates and IRR. Do people just invest in properties like this with the hope of rapid appreciation?
If anyone could chime in and let me know if this deal is good or not or give any personal anecdotes about any investments they have made with large negative cash flow I would greatly appreciate it.
For additional context I am looking at 413 E Herbert Ave. Salt Lake City, UT 84111 and using the rental property calculator on calculator.net