Hi all, I'm looking at buying my first rental property through home hacking. I currently own an acerage about 12 miles out of the city, with about 100K in equity I will be selling. Here is the property:  https://www.realtor.com/realestateandhomes-detail/545-6th-St_West-Des-Moines_IA_50265_M86748-68205 it's in a nice neighborhood with a school nearby. Purchase price is $161,000, I have looked at the property and it is in good shape but will need some updating. The top half has a tenant at $750 a month, the bottom half will probably bring $800 to $850 when I move out. I will be putting 20% down which will mean I will pay about $150 a month for the mortgage. What do you think?

@Garrett Penfield sounds like its a decent deal. Can you raise rents if you update it? Who pays utilities? Also, even though it would cash flow less, why not put less than 20% down since you are going to owner occupy? You could probably put 5-10% down and save the rest for the next investment or repairs or both!

@Garrett Penfield it seems like a solid purchase.  If it’s 2 bed up and down I feel 800-825 each isn’t out of the question.  I’m assuming the electrical is subdivided but doubtful the water is.  I’m assuming the upstairs is on electric heat beings it’s window air. I would talk with your lender and see what the minimum down required is to avoid pmi and go with that if it is less than 20%.  It would either free up money for another down payment on another unit or give you capital for improvements And a capx budget.  I would also consider the route of not house hacking if your current rent/mortgage is less than what you can get out of rent from the lower unit.  Beings you said you wanted to put 20% down.  Are you doing this as a business or just personal ?  A lot of factors and options are available.  Hopefully this helps.  I also invest mainly in Des Moines off you’d ever like to meet up reach out.

Thanks for the input guys! Electical and gas are divided water is not. it is two bedrooms up and down. The reason for the 20% down is because I'm financing through a government program called NFC. They give you $10,000 to renovate homes in certain areas. One downside of going through the NFC is they don't do PMI. If your down payment isn't enough they make you take out a second personal loan at something like 10% interest to cover the difference. Because of the high interest rate, I'm going to put down whatever I need to to avoid the second loan all together.