Trying to house hack at 21 before I turn 22 — does this deal actually work?
Jonathan ShowalterPro Member
Member since 2025 · 11 posts · 5 votesTrying to house hack at 21 before I turn 22 — does this deal actually work?
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Jesus SuarezBusiness Member
Lender · TX, FL · Member since 2025 · 131 posts · 56 votesQuote from @Jonathan Showalter:
@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.
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.
24 Replies
- 2moJesus SuarezBusiness MemberLender · TX, FL · Member since 2025 · 131 posts · 56 votes
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!- Member since 2025 · 11 posts · 5 votes2mo
@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.
- 2moJesus SuarezBusiness MemberLender · TX, FL · Member since 2025 · 131 posts · 56 votes
Quote from @Jonathan Showalter:
@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.
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.
- 2moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
What are the cash flows post move out?
Brick House CPAs53 Reviews - Property Manager · Orlando, FL · Member since 2026 · 22 posts · 18 votes2mo
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.
- CO · Member since 2019 · 22 posts · 5 votes2mo
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.
- 2moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 3k+ posts · 873 votes
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.
- 2moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Jonathan Showalter:
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?
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 management4) 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:)
Logical Property Management4.9465 Reviews - 2moRicky TrinidadPro MemberPittsburgh, PA · Member since 2026 · 21 posts · 8 votes
First, respect for running numbers at 21 instead of buying on vibes. That habit is worth more than any single deal you'll ever do.
I've been building since 1996, including new construction rentals, so let me answer the question nobody's fully answered yet: why builders discount, and why that matters to you. A builder with standing inventory almost never cuts the price. A price cut poisons the comps for every unsold unit in the community. So we pay closing costs and buy down rates instead. Same money to us, invisible to the appraiser. That means a new construction duplex with a 2-1 buydown or permanent buydown can genuinely beat a resale at the same sticker, and the builder will often say yes to an ask a resale seller would laugh at. You have more negotiating power with a builder carrying inventory than with any individual seller. Use it.
Now the underwriting. At your age with 5% down, here's the only test that matters: can you comfortably pay the full PITI plus PMI by yourself with the other unit empty? Not "will rents cover it." You live in one side, so half the building produces nothing. The other $1,800 is help, not a foundation. Tenants leave, units turn, and an hour south of Fort Worth your renter pool is thinner than it looks on paper.
And when you model that $1,800, take out the quiet stuff before you call it cash flow: vacancy, maintenance, capex reserves, insurance jumps, taxes on a 2021 assessment that will get caught up. In Texas, taxes and insurance are the two lines that break new landlords, not the mortgage.
If the deal only works with both sides full, every month, at today's rent, you don't have a deal. You have a bet on nothing going wrong for 24 straight months. But if you can carry it alone, even uncomfortably, and the second unit turns your housing cost near zero? That's how a 21 year old gets 10 years ahead. Buy the version of this deal you can hold through a bad year, and go squeeze the builder.
- Member since 2026 · 12 posts · 7 votes2mo
One angle nobody's touched yet: why is the seller potentially willing to accept $40K under list, vacate a unit, and cover $10K in closing? That's worth digging into before you're under contract, not after. Days on market and any price history on the listing are the first things I'd check. A newer-build duplex accepting those terms without a fight usually means something, whether it's genuine motivation to sell fast (relocation, financial pressure) or just an overpriced listing finally meeting reality. Either is fine to move forward on, but knowing which one you're dealing with changes how hard you should push and what else might be negotiable (the vacate timeline, repairs, etc).
- 2moRicky TrinidadPro MemberPittsburgh, PA · Member since 2026 · 21 posts · 8 votesGood angle, and on a newer build there's often a boring answer to your question. If the seller is the builder or an investor who bought from one recently, $40K off list plus closing cost help isn't distress. It's standard inventory clearing. Builders protect the comp by cutting everything except the recorded price, and quarter end or the last few units in a phase will shake loose exactly these terms from a perfectly healthy seller. Price history still tells the story though. A private seller offering those terms on a 2021 build is a different conversation, and that one deserves the digging you're describing.
Quote from @Enzo Giuliani:
One angle nobody's touched yet: why is the seller potentially willing to accept $40K under list, vacate a unit, and cover $10K in closing? That's worth digging into before you're under contract, not after. Days on market and any price history on the listing are the first things I'd check. A newer-build duplex accepting those terms without a fight usually means something, whether it's genuine motivation to sell fast (relocation, financial pressure) or just an overpriced listing finally meeting reality. Either is fine to move forward on, but knowing which one you're dealing with changes how hard you should push and what else might be negotiable (the vacate timeline, repairs, etc).
- 2moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 123 votes
Quote from @Jonathan Showalter:
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?
@Jonathan Showalter
Sounds like you've put together a thoughtful plan. While you wait, I'd focus on confirming actual lease terms, reviewing operating expenses like taxes, insurance, and maintenance, and making sure there aren't any deferred issues even on a newer build. If the numbers still work with a few conservative assumptions, you'll be in a much better position long term. Best of luck with the offer! - Member since 2025 · 11 posts · 5 votes2moThanks for the input everyone. Here’s an update: Seller counter offered at full price (375k which he had an appraisal come in at 377k) and seller covers closing costs or 360k and buyer covers closing costs which are around 10k. After talking with my realtor and people that have been in real estate for a while I’m thinking of upping my offer to 355k and we cover closing costs. This won’t cash flow much or have good cash on cash returns but I was told if I’m looking at house hacking and then using it as a long term rental it’s a good opportunity to build equity over the long term. And yes, I understand that the first year will be different with more expenses as only one side will be rented out (it’s currently leased out till late 2027). Here’s the numbers at that price: Purchase: 355k (5% down), closing costs: 10k, interest rate: 6.625%, PMI: $95, tenants cover all utilities, vacancy-5%, cap ex-4%, and maintenance-4%, yearly taxes: $5,800 (the first year or two I will be able to use a homestead exemption and I think it should be more around $4,500), insurance: $2,400, estimated rent in two years: $3,400.
- Member since 2025 · 11 posts · 5 votes2mo
Here's a link to the bigger pockets calculator report: https://www.biggerpockets.com/analysis/rentals/36d0113e-c465-4a5c-b21c-7b0ff8d9d9b4
- Member since 2025 · 11 posts · 5 votes2mo
@Jesus Suarez,@Aaron Zimmerman,@Ricardo Gonzalez,@Tyler Ruppert,@G. Brian Davis,@Drew Sygit,@Ricky Trinidad,@Enzo Giuliani,@Vijay Friedman.
I provided more details as well as a link to the report I generated for the new offer I plan on submitting. Curious what your thoughts would be.
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes2mo
Do you know if the lease is up soon or MTM where the owner can even vacate a unit? That's something you want to confirm along with the owner being open to it before offering and getting excited.
I would look at what you'll save occupying vs once both units are rented. Keep in mind you are putting 5% down so it's not going to be a cash cow, benefit of house hacking is saving money while getting into a property for under the 20% down. I would not be surprised if they decline your offer though. That is pretty far under.- Member since 2025 · 11 posts · 5 votes2mo
@Caleb Brown Yes, the seller is willing to vacate one unit. We upped our offer to 355k and we cover closing costs and we are willing to sit on that for a while. (The seller is already willing to come down to 360k)
- 2moWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
These numbers look very good indeed, but I would undervalue this deal on the assumption that today’s interest rates remain unchanged and confirm all costs involved, especially taxes, insurance, leasing conditions and maintenance. Being a fairly recent construction in Texas, you need to find out about warranties from the builder and anything else relevant.
Good luck!
NETWORTH BUILDERS5236 Reviews - 2moJeffrey McKeePro MemberReal Estate Agent · Plano, TX · Member since 2013 · 479 posts · 91 votes
Congratulations on taking that first step at making offers. My question would be: why an hour south of Fort Worth? Is it proximity to family or work? How's the rental demand in that area? How about appreciation and resale?
- Member since 2025 · 11 posts · 5 votes2mo
@Jeffrey McKee This is where I live and work and where I want to purchase
@Jonathan Showalter Did they accept your offer of $355k with you covering the closing costs?
- Member since 2021 · 8 posts · 0 votes2mo
Jonathan — $335k on $3,300 leased gross is the right lever. $375k list is 0.88% rent-to-price; $335k is 0.99%. House-hack year 1 you lose one $1,650 while you live there, and you still carry PMI at 5% down / 6.625%.
What I do not see: taxes, insurance, HOA, and the actual PITI. "BP calculator looks strong" is not enough — one high Texas tax bill can wipe year-2 cash flow after you move out.
Before you raise the offer, I would want tax + insurance quotes, PMI dollars, and a year-2 (both rented) cash flow at $335k vs whatever they counter. Reply with those and I'll run it.
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