First Investment Purchase

[Joe Young]

Hey everyone,

I'm looking to purchase my first investment property.  I'm from the southwest suburbs of Chicago and have a few known options, and I'm sure a few unknown options.  I just purchased a 2b2b condo in December of 2017 and have been paying that down on schedule, not much extra.  In order to house hack, my girlfriend (now wife) and I picked up a roommate.  His rent payment covers our mortgage so we have been able to save our finances rather rapidly.  We have up to 30k at the moment that we are willing to invest in order to preserve a healthy cushion of 'just in case' money.  

Now, here are the options...

In a southern suburb of Chicago (not a HORRIBLE one, but D or C class for sure) called Lansing, there are a couple of 1b1b condos available for purchase at around 40k, most others start at 50 or 55k. Nothing seems wrong with them, the HOA payment is low and taxes are low. With a conventional loan, this seems like a viable option and I've already done an analysis of the property. With 20% down, it would likely produce around $200 positive cash flow right off the bat.

Alternatively, we were thinking of purchasing a 4 unit building and using an FHA loan in that same area. There is one 4 unit in particular that I was looking at that is listed at 260,000, I imagine I'd close around 220,000 considering the time it has been on the market. Instead of 1b1b like the 40k units, these are all 2b1b units except for the master which is 3b2b. We don't particularly want to live there, but I am wondering if the sacrifice would be worth it. If we were to go this route, would I be able to change my mailing address to this location and not occupy one of the units and "live there" on paper? Is this legal? I figure I'm already renting out the 2nd bedroom in our current home and covering the mortgage, so if I make 0 income on the 4th unit in order to obtain the FHA loan, it's somewhat of a wash since our current mortgage is paid. It is absolutely worth mentioning that I CAN NOT rent out our current condo entirely. Room rent is acceptable, but I must live on the premises. Otherwise, I'd just pick up a family and raise the rent, then moving to the 4 unit after purchase.

Looking for advice overall, experience with D or C class housing, alternative routes (specifically rentals, not interested in wholesale or rehab)