Hi I am a first time buyer with hopes of becoming a buy and hold investor in the future and I am contemplating making an offer on a Duplex that fits all my needs as a family man but from the numbers I ran it won't cash flow (while I live there). The tenant's rent will cover most of the mortgage but not all leaving me coming out of pocket about 400$. I am currently renting for $1000 so I would be saving 600$ a month. Some advice please !!
Thanks in advance !! :)
Sorry misspelled my title. Flowing****
I would run the numbers as if both sides were rented( you being one of the renters) and if the numbers work, do it.
What would the cash flow situation be if your weren't living in one of the units?
If I were to rent out both units (not live there) I estimate positive cash flow of about 150$ and that's after all expenses " Vacancy, Cap Ex etc.
If all you would be getting is $150/month fo both units rented. I say it's a dog.
Base the purchase on your end goal not what the deal is currently doing. Many people buy deals because it looks like a good deal, not because it matches your end goal.
I know because I bought a lot of wrong properties because they looked like good deals. If you goal is buy and hold and use appreciation then base the deal on that. If you need cashflow then base it on that. Only you know your goals and can answer if it is a good strategy to achieve your goal. Hope this helps
Thanks Joe and Steve. Yes I am looking for cash flow so this might not be the best path from what I can see. Thanks again for the insight !