Purchasing a currently leased home

[Matthew Tomerlin]

Hi everyone. Looking to get advise on following through with purchasing a home that I currently reside in and lease from the home owner which we would in turn keep in our rental portfolio once we move in a few years. The homeowner is willing to sell to my wife and I at about 5% under fair market value, and I know that isn't the kind of favorable number that all REI look for but we would be able to finance FHA with low cash down. Since this would mean having fairly low equity in the home once it becomes a rental property to our future tenants, I'd love to hear your thoughts. We live in San Antonio, TX and the rental market is favorable for the homeowners. Purchase price on the home would be 157,000 and I estimate we could rent it out for 1,400/ mo after about 8,000 in updates needed.