Would this be a crazy plan?

[Gwen Fyfe]

I moved to Cleveland about 10 months ago. Previously, I lived in the UK for 9 years. So in the USA, I have very little credit history and very little employment history - but what I do have for both of these is good.

I want to get into multi-family investing through an FHA loan. I might squeak past the qualification requirements and I have a mortgage broker who wants to help me out, but realistically, it would be better to apply in 6-8 months when I'll be able to demonstrate a year of stable employment. (I have a good job with a small accounting firm here.) In the meantime, I'm renting an apartment, and my lease is up in June.

There are a couple of blue collar suburbs of Cleveland that I've been exploring and would be perfectly happy to live in. In some of these areas single family homes come onto the market every couple weeks beat up but livable for 20-30k... which I could scrape together in cash right now, if I needed to.

So what I'm thinking is...

-Scrape together as much cash as I can and just buy a fixer-upper SFH outright before June. Cut both my commute and housing expenses by two thirds.

-Move in (with a sleeping bag and hotplate if necessary!), start fixing it up, and save up another $8,000-$10,000 for an FHA down payment and closing expenses - something I've already done, and it'll be even easier once I'm not paying rent.

-In another 6 months or so, buy a nearby multi-family home with an FHA mortgage. Move into that and rent out the newly fixed-up SFH.

-Live in the cruddiest unit while I do more live-in fixing up, rent out the other units ASAP. Suddenly, 3-4 doors cash flowing within a year.

This seems to make so much sense that I think there must be something obvious I'm missing. What are the downsides? What are the risks? What should I do to protect myself? Am I being stupid? (If it's stupid and it works, it's not stupid, right?)