Thinking about buying a 4 unit

[Vashti Green]

Hi. I'm 23, recent college grad (engineering) and am looking into buying a 4 unit home(each 2 br, 1 ba). I would live in one unit with my husband and rent out the other 3. Building is 140k. My gus says we can get it down, and I always go with my gut. We expect to be able rent the other units at about 725 each. We assume a 1200 mortgage+pmi+taxes+insurance.

We don't currently have much of a savings so we are working on coming up with 10% now. We plan to put down the minimum 3.5% (FHA) and are allotting 2.5% for closing costs and the 3% for fixing a few things in our personal unit to make it a bit nicer for us.

In 2 years we plan to do it all again and grow by adding a duplex and 2 years later adding another duplex and in year 5 finally get to a total of 10 units.

I'm looking for feedback. We are very new to this, but we are serious and are committed. What questions should I be asking myself in relation to the 4 unit building? Also, we are thinking about using a management company and basically pretending to be just one of the tenants. What are the thoughts there?

[Amadeus Hladun]

Awesome! I am also 23 and newer to real estate investing and the one thing I have learned for sure is to ALWAYS do your due diligence. when you say 'we guess' and 'we assume' do you mean exactly that? because if so then I would say definitely do the leg work to find out the property taxes and those expenses FOR SURE and not assume anything as well as the rent, do the due diligence and do comps in the area with that property. In the grand scheme of things it is very little effort to put in to avoid a bad investment. If you put in the 20% of the effort now in the things that matter then you will see the next 80% to be a good result instead of bad. But of course you may have done all that but just in case you didn't I thought I would put my 2 cents in! Good Luck :)