Inside My $1,000 Homelab: How I Rebuilt Big Tech Services in a Tiny Rack

So this is not a style of blogs I am used to writing, this is more of a development documentation in my homelab journey, my initial steps, improvements I made, things I learnt, questionable choices I took, and finally how this made me, or to be honest, encouraged me to be even more of a spendthrift.

For those who don’t know, homelab development is a hobby that people who are very much into IT, or even non-IT folks who are passionate tinkerers, take up.

In the post below, I break down what a homelab actually is, why it’s becoming an essential learning tool in IT, and how it can help everyday users reduce their reliance on data-hungry corporate services.

Table of Contents

• What’s a homelab? Minimum requirements and baselines.
• What hardware to use? What software to use? Best options and things to consider.
• Price and budgeting.
• Networking and Network Applications
• Remote Management and Remote connectivity.
• Conclusion

What’s a homelab?

Minimum requirements and baselines

A homelab is, at its core, a way to create your own convenience. For example, you can use it to learn cloud and cloud-style development without paying for AWS. If you’d rather avoid Google Drive and prefer a self-hosted backup setup, that’s another perfectly valid use case. What I’m getting at is simple: you don’t always need paid services—your homelab lets you host and manage these solutions yourself.

A homelab basically means deploying one or more compute nodes as your own servers. You can run any of the services mentioned above (and more) to gradually free yourself from corporate-controlled ecosystems. As for requirements? There really aren’t any. Anything from a Raspberry Pi Zero to an enterprise-grade server can power a homelab.

It’s your tinkering space, your learning space, somewhere you can try whatever you want and still come away smarter.

What hardware should you use? What software makes sense? What are the best options and what should you keep in mind?

Hardware, as mentioned earlier, can be almost anything—from a tiny Raspberry Pi Zero to a full enterprise-grade server. The real factors to consider are how much automation you want, what your goals are, and how reliable you expect your setup to be.

And of course, depending on your use case, you can always opt for a faster or more powerful system.

Suggested Hardware (Minimum Specs):

• CPU:

  • 4 cores

  • 4 threads

  • min clock: 2.9

  • Boost: anything is fine.

• Storage:

  • I recommend using NVME for the boot drive. This can be a 64GB Octane or even a cheap Crucial drive,

  • Expanded storage, you can use SATA SSDs and HDDs.

  • In case you’re storing movies, I would recommend at least a of storage 1TB.

• Network:

  • Almost all systems come with a GBPS NIC, so you can use that. It’s like a 100+ MBPS up and down, so it will be plenty for streaming even to remote systems.

  • Consider getting a network switch; this gives you more headroom for expansion in your homelab down the line.

  • This is future-proofing, but if you need expansion, then consider getting a 2.5 GBPS NIC and also a 2.5 GBPS switch. THIS IS COMPLETELY OPTIONAL. In case you’re doing regular small backups, you need not buy the 2.5 GB NIC.

• RAM:

  • 16GB is recommended.

  • Clock speeds can be as low as 2400 Hz or better, 2666 Hz; any of these 2 will work.

• GPU:
  • Almost all CPUs come with an IGPU, except for some CPUs and board providers.
  • In case you’re doing media hosting, like using Jellyfin or Plex, I would suggest you have a PCIe slot open on the system you have chosen and buy a cheap GPU that supports video encoding.

From an upgradability standpoint, these are the things I wish I had looked for in my initial days of homelab development:

• Upgradability:
  • What’s the max upgradability of the CPU and RAM?

    • Depending on what you are doing, you must always consider whether a system can be expanded from the CPU side.

    • The CPU must not be the main bottleneck in the chain.

  • Does it have a PCIe slot?

    • This is very, very important can sometimes be a deal breaker because having direct access to PCIe allows for integrations far greater and allows for improving a system, which is a 10 directly to a 100.

    • I am saying, adding a GPU, a Raid card, sata expansion, and so more.

  • What is the expansion allowance given by the motherboard?

    • Apart from PCIe, which can be limited by the number of lanes allocated to it, it’s always a great option to see if any other slots are available.

    • Slots such as SATA, m.2 NVME slot, M.2 E key slot, etc., allow for expansion without disturbing the PCIe slot, allowing for even more tinkering.

  • What are the min and max TDP of the system?
    • If a system has all the expansion in the world but lacks power is practically useless, so having a CPU that can support higher TDP and a motherboard that supports that will always help.
    • Higher TDPs allow for GPUs to run without a dedicated PSU, which greatly enhances portability.
    • A higher TDP allows the CPU to work more, and in some cases, it can also be overclocked (this is somewhat of a rare case).

Based on everything mentioned above, the systems I recommend most are SFF (Small Form Factor) machines and tiny PCs—especially models from Lenovo and some solid options from HP. Most Lenovo and other OEM SFF systems include nearly everything you’d need, though they aren’t exactly portable. Tiny systems and mini PCs, on the other hand, offer great portability but may not always include every feature you’re looking for.

Here are some of my top suggestions:

• Lenovo ThinkCentre M720
• Lenovo ThinkCentre M920
• Lenovo ThinkCentre M920q
• Lenovo ThinkCentre M920x

These systems are by far the best bang-for-the-buck all-inclusive systems, with all the necessary hardware and expansion for a 1Ltr form factor. What do I personally own? I have a Lenovo ThinkCentre M910 (Secondary system and sadly, no PCIe) and a Lenovo ThinkCentre M725 SFF (Main System with PCIe and much more).

Suggested Minimums on the software side

So, for a self-hosting setup, there are two tiers of software you need to worry about: the operating system and the services you’re hosting. This choice is also heavily influenced by the type of architecture you’re aiming for. For instance, if you want a multi-system virtualized implementation—where all your OS instances are dedicated VMs and none run directly on the host (basically containers with more accessibility)—then going the hypervisor route makes sense. In that case, the best OS is Proxmox.

The second option is a NAS-type approach, where you use something like TrueNAS, HexOS, or any similar implementation, and deploy your containers through Docker. The final option is a bare-metal Linux install with Docker installed and used as-is (which is what I’m doing currently).

All of these come with their own advantages and drawbacks. For example, maintaining drive backups, RAID, and snapshotting is relatively easy on specialized hypervisors like Proxmox and NAS systems like TrueNAS, HexOS, Unraid, etc. Doing the same on bare-metal Linux is more daunting—great for learning, but not something I’d recommend long-term. So choose carefully.

You should also think about hosting and VPNs. I’m the only one using my setup, so I mainly rely on Cloudflare Tunnels for public endpoints, and for an even better lossless connection, I use Twingate. You can use Tailscale or implement your own reverse-proxy VPN—whatever works for you.

Storage and RAID

Storage is just as important to your homelab as the mini PCs or any of your other compute hardware. As a general rule of thumb for RAID, use matching, high-capacity enterprise drives whenever possible; if you’re on a budget, look at reputable refurbished or recertified vendors like ServerPartDeals instead of random used disks.

For layout: RAID 5 needs a minimum of three drives, and RAID 10 needs a minimum of four (two mirrored pairs). In practice, you’ll often add more drives for better performance, additional capacity, or to support one or more hot spares if uptime matters. Whatever level you choose, schedule regular data scrubs on the array. On checksummed filesystems like ZFS, this means periodically reading all data, catching silent corruption (bit rot), and repairing it from parity or mirrors on both HDDs and SSDs.

If you want reliability plus an easier setup experience, TrueNAS (CORE or SCALE) is a very solid option: it uses ZFS under the hood, providing software RAID (RAIDZ and mirrors), end-to-end checksums, snapshots, and strong data-integrity features out of the box. In general, using a modern copy-on-write, checksummed filesystem like ZFS (or Btrfs on Linux) instead of traditional filesystems dramatically improves long-term storage reliability.

Price and Budgeting

The price of all the items you buy is very important, and making sure you fit all you want in the budget you have is a serious consideration. Remember, Homelabbing can be both the most affordable upgrade and sometimes the most expensive investment one can make. Always make sure you meet your ROI requirements and only invest when you think it will add value to your home IT requirements.

So I won’t tell you what to buy, that’s a very subjective choice and varies from person to person. Instead, I’ll explain this using my own setup, based on the iterations and improvements I’ve made to my homelab. I first started with a very, very simple setup:

• 1 Network switch - 8-port Gigabit switch from TP-Link

• 1 White box for cable management

• 1 USB hub + 1 USB switch

• 1 Pi Zero W for PiHole

That was my homelab, its only purpose was to block ads, and make sure I had ample networking for my 2 laptops. Then, I found a great deal on Flipkart, of all places, for a refurbished mini pc with i5-6500T and 8 GB RAM for 100 USD, so I took it up and bought it.

Initially, I did have plans to convert this into a mini NAS of sorts for data backup, and that’s what I did: installed Debian, installed Docker, and moved my Pi-Hole to this machine cause this had a better and reliable network connection compared to my Pi-Zero.

A nice upgrade. Less clutter and it’s neat, then I wanted to improve it and learn more using it, I installed Wazuh, Immich, Jellyfin, and Grafana. Now, storage was lacking, so I upgraded the storage; the main drive became 1 TB, the secondary drive became 500Gb, I did not move to a RAID type storage, I know that’s kinda stupid, probably still is but instead I wrote a self mirror script which updates and copies the data (mirrors) it every night, my reason drive capacity mismatch for raid.

I was using SMB for data transfers, and after installing Wazuh, I found out SMB is a pain to work with (sec patches + configs), so I went with a different option called SSHFS, which hosts a file share that can be accessed via SSH from Windows. I loved it, so I am using that as my go-to for 1 year now, and it’s solid.

My next upgrade was buying a secondary mini-PC, which I mainly wanted for PCIe slot access for, you know, GPUs and stuff. I was newly getting into agentic AI, so I wanted to experiment with that. I bought one with great specs—around 120 USD for an i7-6500T and 16GB RAM—but, dumb me, I picked up a Lenovo ThinkCentre M910, which doesn’t have a PCIe slot. I kept it anyway because the CPU was good and the condition was solid. A few weeks of hunting later, I found an even better deal. This time it wasn’t a mini-PC but an SFF system with a Ryzen CPU—much stronger—and the best part is I was able to snag it in exchange for my first mini-PC at no extra cost. Big W’s. I repurposed the Raspberry Pi Zero as my monitoring system, which now gives me live stats on my main instance.

I moved a lot of the workload from the one mini pc to this and made the SFF my new main and the ThinkCentre the second pc or IC2 for short. But it was kinda congested, the white box was all I had interims of cable management, and that was filling up, it was literally tape it down to make it close. At this point, my investment in this was close to 500 or so USD, the majority is investment in getting stuff implemented on the networking end, upgrading the internals by adding in more storage, and making sure RAM and networking won’t be an issue.

Now that I have this SFF system, and the cable management situation is getting a bit inaccessible, I wanted to build myself a homelab rack. So I hopped on a call with my friend Mukesh, an industrial designer and the guy I always consult for 3D printing and stuff. I wanted this to be modular and future-upgradable, and I have zero knowledge when it comes to 3D printing. He suggested using extruded aluminum because it’s easy to work with, expandable, looks sick, and can hold cable-management brackets. Basically, perfect.

After weeks of me torturing him, he finally finished the designs, and this is the sample he came up with. I loved it and wanted to get started right away. I also found a great guy on Reddit who helped me

There were issues, one of them being that I wanted reliability, and I wanted to easily debug this and monitor things, so I needed the previously implemented Raspi monitor and now one more of it, and an IP-KVM to make this happen. Also, I needed to buy hardware and procure the materials to make this. So I bought all of it, spent weeks waiting, making sure all of it was in good shape, and at the end, I got all the parts, except for the 3d prints.

After quite some time working on this and making sure everything functioned properly, I finally have the finished product. It looks like this, and this is my current iteration of the homelab. It has all the goodies I wanted, with space for expansion—two empty slots for extra hardware and one slot for a new mini PC (which I plan to buy next month). Everything I wanted to implement is now in a single package with no white box or extra space wasted. In the image it might look huge, and yes, depth-wise it’s a bit large, but length-wise it’s the same as the white box.

All in all, the running total for this homelab is just under $1,000, including new Raspis, cables, KVM gear, 3D printing, rack hardware, all the computers, and more.

What I have currently, hardware-wise:

• 1 SSF system.
• 1 Mini PC.
• 2 Network Switch: 8-Port and 4-Port.
• 1 USB Hub.
• 3 Raspi Zero: 1 KVM, 2 for monitoring (connected via Ethernet - Ethernet HATs).
• A Mini Rack for future expansion, 2 empty slots, and 1 mini pc slot, which I will buy in a month.

But this was worth it, in many ways, I have learnt a lot. I have learnt a lot about hands-on agentic AI, to the point I can make agents for literally any human task. I learnt a lot about debugging, implementation, 3d printing, hunting for new hardware, and not to mention not paying a dime for services like: Google for drive and photos, n8n for workflows, Figma for designs, Spotify for music, Netflix for shows, and AWS for deployment testing (yes, local AWS API). I have saved quite a lot of money in ROI. I need to wait for a few months until this rack pays for itself.

As I said before, ROI is everything. If you’re able to get the best value from this in the long run, investing in this is one of the best decisions ever. This is my current homelab service setup:

Its kinda empty at the moment at the moment but I am actively working on adding new aspects to it by running far more services and making it overall a daily driver. I have a bunch of things I have automated, such as n8n auto audit workflows. Basically have I have agents auto check and audit my main servers (Proxmox nodes) to check if any errors are present and give me notifications every 3 hours on if any service is down, any critical issues, and stuff like that.

What I currently have running:

• Immich (Photo Backup)
• Jellyfin (Music and Movies)
• MongoDB (Local storage for my day job)
• Affine (Figma alternative)
• Striling (PDF editing suite)
• N8n (Automation)
• Ollama (Local LLm)
• BitTorrent (ISO Downloads)
• Grafana (Monitoring)
• Prometheus with Node-Exporter & PVE-Exporter (Just on the main nodes communicates back to Grafana)
• Wazuh (Security - Personal SIEM)
• PiHole (DNS Sinkhole)
• Portainer and Portainer agents (Easy GUI for container management)
• I also have an NFS type share where I load all my files via SSH-RFS for backup, and I don’t want to move out and use something like Nextcloud, cause this is really simple and I like it.

What I will install in the future:

• Traefik
• Bit Warden (password manager)
• Will add more once I see the need for it.

I might have invested some cash into this, and with the money I was using on providers such as Google, Figma, Spotify, AWS, etc., I am saving a ton of cash in this manner, not to mention the learning I got from this.

And for the foreseeable future, I might invest even more to learn even more and automate a lot more.

Networking and Network Applications

Networking is also a very crucial aspect of your entire homelab; you need to decide what you want to do with respect to your homelab requirements and plans. I have one 8-port gigabit switch. I’m happy with just 8 ports because I’ll have a maximum of 7 devices, and 1 port is for the internet gateway connection. If needed, I can increase the number of ports by buying a new device, but that’s far into the future.

1 Gbps is all I need right now since I only have laptops, and I don’t need a 2.5-gig or 10-gig connection anytime soon, so 1-gig is more than enough. The same goes for PoE — I’m not connecting anything that requires PoE, so that would simply be a waste of money. This ties directly into your budget and future planning.

If you’re looking for a more powerful system and you find it useful, do buy it; that applies especially to network equipment like switches. Apart from this, I’d say using all your systems and connecting them via cable is the best approach: first, if you already have ample Wi-Fi coverage, and second, to avoid congesting your Wi-Fi network and making it harder for other essential systems to connect.

If Wi-Fi congestion isn’t an issue for you, consider hosting a router as well to act as an extender for wireless connections in your homelab. Just remember that adding more Wi-Fi at a single point isn’t ideal, especially if all of them use the same band.

Remote Management and Remote Connectivity

Remote management is also a good add-on. If you’re always tinkering with the system—and if you’re as much of an A-Hole to the system as a certain someone writing this—it will break a lot. Having the ability to debug it, correct it, and avoid dealing with a ton of cables every time is a nice thing to have. It gives you the freedom to break things comfortably. For that, I suggest investing in an IP-KVM. Something like a Pi-KVM is an investment you’ll appreciate in the long run. Other good options include nano-kvm and pico-kvm; all of them can be found on AliExpress for dirt cheap.

Let’s say you’ve gotten the IP-KVM—what’s the point if you can’t access it outside your network? That’s where a reverse proxy and a VPN come in clutch. I use Twingate for that purpose; it’s great, lossless, and has the level of security I need. Alternatives like Tailscale also offer excellent accessibility.

Some systems claim to have built-in remote management, like Intel’s vPro series and AMD’s DASH. I have both types of systems, and none of them even started to work for me—bad luck, I guess. So for reliability, I’m using a Pi-KVM myself.

Conclusion

Homelab is the best way to learn IT. I have been preaching this to all my trainees at my work who want to improve. This allows you to tinker with practically no extra cost and especially no fear of paying a service provider every month. You can explore new options and implement cool things, it’s an addiction, I can say, I love to have.

If you want to make something similar (homelab rack), here’s the Printable link: Printables

If you want to contact Mukesh for 3d design assistance, here’s his Upwork Profile: Upwork Mukesh J

To connect with me, this is my LinkedIn: Chiranjeevi Naidu

I will be writing more blogs on agentic AI and automations for IT management in the coming days, so please look forward to them. Comment if you have any doubts, criticisms, etc. For notification of next blogs, sign up for the newsletter.