FHA Duplex HouseHack

[Michael Cavitolo]

Hello All! 

My Fiancé and I came across this property in Staten Island, New York, where we lived for the last 26 years. We’re looking to buy a duplex for our first home, and house hack it, I believe it’s a great way to get into the investment game. We’re trying to analyze the numbers, and we need some help to determine if this is a good deal.. 

Asking Price : $599,999 

Days on market : 50 

Duplex : 2br 1ba & 1br 1ba 

The 2Br 1Ba is currently rented for $1170… Way under market value, agent said it should be $1800+. The 1Br 1Ba is rented for $1100, agent said it should be $1300+. If we get this property, we’d take over the 1Br 1Ba. 

We're pre-approved for $600,000 on a duplex, 3.5% down, FHA, 5.25% Interest rate, 30 year term. If we get this duplex, our payments would be around $4200, everything included.(Property taxes, PMI, etc). We'd be looking at around $30k down, with closing costs.

If we have a tenant in the 2br 1Ba for $1800/Mo, we'd be coming out of pocket of $2500 for the rest of the mortgage. We fear that when we move out in a 1.5 year from then, that the tenants will not be covering the full mortgage from both units, we'd have to come out of pocket still most likely. Our goal is to get another property and use the FHA loan again, while switching the current one to conventional, hoping there's equity. We have considered jersey, but the areas aren't quite good for the $600k price point for multi-family.

Are we better off just going single family? Thoughts… We just want to make the right first move… Thank you.