Realistic Expectations for FHA Low Down Payment Duplex

[Brad Reiner]

Hello, 

Soon I plan on purchasing a duplex in Lakewood, OH. I plan on living on one of the units and renting out the other unit initially, and eventually moving out and keeping it as a full rental. I'm looking at a homes around $250k since I should be able to afford the mortgage out right even if I had a delinquent tenant or extended vacancy. I'm planning to use an FHA loan where I'll only require 3.5% down and very likely using an Ohio sponsored down payment assistance program. I might have $30-$40k to put towards the down payment and cover closing costs, and whatever other expenses come up.

 It almost seems impossible to find a deal that will cashflow in the case that I move out since I'm putting so little down. I'm wondering, should I accept a very minimal loss (maybe a negative cashflow of $30 a month after expenses/reserves) just to get some skin in the game? A part of me thinks I should just maintain really high standards to get the right deal, but on the contrary, even if I was negative cash flowing $30 dollars a month, the shear fact that I'm losing 30 dollars a month could be worth it in the long run since the tenants would be paying off the mortgage, the property value should ideally increase over time, and I'd be able to build equity that I wouldn't be able to build if I just went off and rented an apartment. I feel like there's a lot of value in just getting started period, and if I don't act now, home prices will continue to rise, and the only thing I'll gain is becoming an expert at using the bigger pockets rental property calculator.

Curious if others have input, have maybe been in the same boat, and how they've reacted to scenarios like this.