Advice on my newbie strategy to REI please..

[Angel Valerio]

Hi BP members.

I am eager to start investing in multifamily homes as buy and holds for rental income.  I did cosign on my mother's home after parents divorce while I was still a college student. However, I've never partaken in ownership responsibilities.

So my plan is to purchase a multifam, live in one of the units for a year while saving my usual 35% of salary plus 15k I'd now be saving from what I currently pay in rent. I'd then have a healthy down payment for another home; Move into that one and rent out full property on 1st location. Eventually repeating the process until I can supplement my income. 

If I'm not mistaken, I can get a conventional loan and put 5-10% down to avoid PMI after paying down 20% of 1st home. The rest would be full 20% down.

Given the mortgage and rental rates in my area, I'd likely need 8-10 units(3-4 properties). So what do you guys think? Also, considering this strategy, would it be best to start an LLC up front, switch after having purchased in my name, or just getting a large umbrella insurance?

Any information would be greatly appreciated. Thanks in advance. 

[Aaron K.]

Simple theory but the trick is in the execution.  Have you been pre-approved yet?  Have you done the math on actual on market properties to see if it checks out in your area?  Are the properties where the math works places you'd be willing to live for multiple years?  These are all things that have to be done and answered before you even start this journey but props for thinking ahead.