Am I setting myself up for success or failure?

[Francisco B.]

Hello all, I am in the process of buying my first multifamily investment property and would like some feedback or advice on my strategy. Can anyone poke a hole in this plan? It looks great on paper but as we all know life is like a box of chocolates.

I am using cash and part of my HELOC for a downpayment on a new construction three family house for $680k. My first house is paid off and I plan to rent it for $1800 a month. I will use this rent plus part of my salary to pay the heloc off as soon as possible. I figure two years.

I will live in one unit of the MFH and rent the other two for $1900 a month. I figure interest and principle on my Heloc will be $1200 a month and roughly $3500 on the MFH. If things get a little tight financially I plan to only pay the interest on the heloc.

Is this a solid plan. Can I improve it in any way. My biggest fear is that someone will not pay their rent and put me at risk of loosing my properties. Someone suggested i rent to section 8 so the rent would be guaranteed.

What do you guys think?. Thanks in advance.