Trying to house hack at 21 before I turn 22 — does this deal actually work?

Question

2021-built duplex, two 3bd/2ba units, small town about an hour south of Fort Worth. Listed at $375K, both units leased at $1,650/mo each ($3,300/mo gross). Pre-approved conventional 30yr, 5% down, 6.625%, PMI.

We submitted an offer last night at $335,000, asking the seller to vacate one unit for us to move into and cover $10K of closing costs. Haven’t heard back yet.

Plan: owner-occupy the vacated unit ~12 months, then convert to rental.

BP calculator numbers at $335K look strong — clearly cash-flow positive after PMI.

Would love input on:

• Anything to watch for while we wait to hear back / once we’re under contract?

• Any gotchas with newer-construction duplexes specifically?

• Anything else I should be checking at this stage?

Jesus Suarez · Answer

For me, I try to keep it simple. I look for at least a 5% cash-on-cash return, and I want the rent to fully cover the mortgage, taxes, insurance, and other operating expenses.

That said, I'm probably looking even more at the long-term appreciation than the CoC return. In today's market, I'm okay with a slightly lower return if I believe the property has strong appreciation potential. But the deal still has to make sense today—I don't want to lose money every month hoping appreciation will bail me out later.

Drew Sygit · Answer

Couple thoughts:

1) Seller may NOT be able to get one of the units vacant for you w/o buying a tenant out of their lease.

2) You didn't share any info on property taxes, insurance, utilities you have to cover, lawn maintenance, etc. So, we have no way of knowing if this actually cashflows.

3) What factors did you use for:- Vacancy- Tenant nonperformance- Maintenance- Future property management

4) What's the estimated market value?- IMPORTANT as you may want to refinance in the near future to lower the PMI or even get rid of it. All it does is drive your APR higher.

5) Good work on NOT offering asking price and offering a price that hopefully makes your ROI and cashflow work:)

G. Brian Davis · Answer

You've done your homework. At this point, I'd focus less on the projections and more on verifying everything. Make sure the leases, income, expenses, and condition of the property all match what you're expecting. A newer property doesn't eliminate surprises, so I'd still go through the same due diligence I would on any other investment.

Tyler Ruppert · Answer

I'd run the numbers on the version where you've already moved out: both units at market rent, with vacancy, maintenance, CapEx, and management included even if you self-manage. That reserve stack usually runs 25-35% of gross rent before the mortgage, so it's worth checking those lines made it into your calculator run. Cash-on-cash on that stabilized version is the metric I'd use at your stage, since it includes your actual financing. If the deal still works there, the year you live in it is just a head start.

Jesus Suarez · Answer

It sounds like you've put together a solid plan. The main things I'd pay attention to are the inspection and the numbers.

Even though it's a 2021 build, don't assume everything is perfect. Have the inspector pay close attention to the roof, foundation, HVAC systems, plumbing, electrical, and drainage around the property. Also, make sure both leases and the tenants' payment history are reviewed.

I'd also verify property taxes and insurance, since those can have a big impact on your cash flow.

Best of luck—I hope your offer gets accepted!

Ricardo Gonzalez · Answer

Great move at 21. House hacking a duplex was my entry point too so I can speak to this pretty directly.

The deal structure looks solid. Asking the seller to vacate a unit and cover $10K in closing costs at $40K under list is aggressive but not unreasonable if it has been sitting on the market for a while. Just be prepared for them to counter and decide beforehand what your walk-away price will be.A few things I'd be watching closely:

Run your numbers at actual market rent, not current leases. $1,650/month on a 2021-built duplex may or may not reflect what the market will bear today. Leases signed 1 to 2 years ago can be above or below current market. Pull current comps before you close and underwrite to those numbers, not the existing leases.

Understand what kind of market you're buying into. I'm not familiar with the Fort Worth area specifically so I can't speak to this directly, but it matters a lot. For me, my duplex play in Orlando was heavily weighted toward appreciation. I was willing to accept lower cash flow margins because I believed in the market's growth trajectory. That made the deal work for my goals even when the monthly numbers weren't spectacular. You need to ask the same question about your market. Is this a growing area with strong job and population growth? And just as importantly, how much new supply has come on recently? A lot of new construction hitting at once puts downward pressure on rents and can make your cash flow projections look better on paper than they end up being in reality. Do that research before you commit.

Newer construction is actually a gift here. One of the biggest surprises with older duplexes is what you find once you own them. Plumbing, electrical, roof, HVAC all become your problem fast. A 2021 build means most major systems are still under their useful life and you're likely still inside builder warranty windows on some components. Check what warranties transferred with the sale.

PMI is the number to kill first. Once you hit 20% equity through appreciation or paydown, get that PMI removed immediately. It's dead money.

Plan for the unit transition carefully. When you move into the vacated unit, make sure the seller vacates it in broom-clean condition with no deferred maintenance left behind. Get that in writing as part of the purchase agreement. You don't want to move in and immediately be dealing with issues.

The 12-month owner-occupy plan before converting is smart. Protect that timeline for your financing terms.

Solid first deal. Good luck with the offer.

Aaron Zimmerman · Answer

What are the cash flows post move out?

Jonathan Showalter · Answer

@Jesus Suarez Thanks a lot for the input! Just curious, what would be your opinion on the financial metrics you would be looking at mainly in the BP calculator if you were doing it at my stage given the current market. Like CoC ROI% and other metrics. The reason I ask is in the case that we give a higher offer I understand the profitability would go down but also to some degree that might be what's required in today's market.

Trying to house hack at 21 before I turn 22 — does this deal actually work?

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