Newbie Trying to Dive Right In

[Jonathan A.]

I am not even sure where to start but here goes……
I am 28 years old, married, and sitting on a condo in metro Detroit that has about 125,000 in equity right now. I was lucky enough to buy at the bottom of the market in 2009. I have been dreaming of owning a multifamily property since 2006 but never was able to pull the trigger due to financial issues. My life has somewhat stabilized now and my wife and I both have very stable jobs with annual income hovering around 275,000/year. We have been aggressively paying down my wife’s student loan debt which started around 330,000 in June of 2012. We got it down to about 169,000 in just under a year by taking some equity out of the house, 401K and literally eating peanut butter and jelly sandwiches daily. Frankly we try to live on a college students budget and it has been working well for us.
We are at a point now where we are thinking about having kids and know that our time living in our condo is running short due to a variety of reasons (location far from parents, no yard for a child to play, schools are not up to our level, etc.)
I brought up the idea of selling our condo and purchasing a multifamily property near our parents that we would owner occupy. This would solve the issue of dropping off the baby with the grandparents during work, being in a good school area, and many other things. My wife was 100% on board with the stipulation that we find something clean and nice with not too much headache. Ideally I would prefer to get right into a larger dated complex 15-30 units, live in one of them and begin updating them one by one. The only problem is units in this range cost over a million dollars in my area. I don’t have the 20-25% down that I assume I would need to get into something like this and obviously don’t have any experience. Everyone may think I am crazy but I am not too concerned with the experience part. I would probably have a property management company handle the billing and marketing but would like to be responsible for the maintenance and updating myself. I am an engineer by trade and am very handy when it comes to household things. Am I shooting for the starts with such ambition? My wife and I have already decided to stop the aggressive student loan repayment plan we have implemented and instead save the 10,000 / month we have going towards the loans and putting it in a bank account but at that rate it would take me a considerable amount of time to save up the 20-25% down payment on a 1+ million dollar property. We have very little in savings (under 5000) and the 125,000 in equity in the home currently. Any thoughts or suggestions on how I can make this dream a reality? Am I making financing too big of an issue? To add to the situation I found a 1.5 million dollar 28 unit property in the perfect location that is on the market. The place looks immaculate from the outside and the units inside look dated. Great upside potential. Is there anybody in the metro Detroit area out there that can possibly help me with understanding our market better and possibly act as a mentor?