How hard is it to get + cashflow on owner occupied property (250k+)?
Hello All,
I'm new to the forums and am interested in owner occupying a 'plex (2-3 units most likely). Prior to discovering BP I assumed the only rules for successful renting were to not have vacancies and not to take massive losses due to repairs/bad tenants. After browsing it seems that a lot of people here adhere to the 50% rule and having positive cashflow of $100+ per door. These metrics have completely changed my outlook on becoming a landlord. In the area that I'm searching (University City-Philadelphia) du/triplexes are going for $250-400k with average rent of 800-1200 per unit. Using this calculator{1}, every deal I look at results in thousands of dollars in NEGATIVE cash flow per year.
So my questions are:
1) Do these metrics make sense in the context of higher cost RE? Most of the comments I see on here involve properties in the 80-120k range.
2) Does the fact I'll owner occupied change how I should look at this? ie: opportunity cost savings. Honestly I'd be fine with someone paying my mortgage for me and just saving market rate rent/mortgage every month...perhaps to use later for properties I don't occupy. Is this good enough or are the risks of being a landlord too great for "Hey, at least I don't pay any mortgage" to be sufficient? Basically do I NEED positive cashflow for an investment to make sense?
Thanks for any input!