No Reserve + Need Tenant to Afford Mortgage = Too much risk?

[Joe Pearson]

So, I'm planning on purchasing a duplex or triplex within Manchester, NH, but my fiancee and I can only afford an FHA Loan 3.5% down and 4.85% interest, 30 yr mortgage, and that will leave us with practically no reserves and we can only afford the home if we have renters.

True, technically we could cash advance our credit cards, pull from retirement funds (Roth IRA, 401k and mutual funds), but we really really don't want to.

I apologize for not poking around on the forums enough to answer this question myself, I tried for a few hours but couldn't find an answer with enough similarity or that could help out enough (I am absolutely sure there is, I just wasn't looking in the right places).

Assuming we find a duplex/triplex that looks absolutely perfect to 2 general home inspectors and it comes with 1 vacancy (for us) and the rest rented with leases and they are perfect tenants. Would the risk still be with it? Would the juice be worth the squeeze?

For reference, my long term goal is to be a buy and hold landlord with small multi-families (probably under 4 units), so I would keep this property.

Thank you!

-Joe

[Mindy Jensen]

@Joe Pearson , Murphy's Law RULES real estate. Every property I have ever purchased, something has broken within 2 weeks of closing. 

Every. 

Single. 

Property.

The cost to repair the broken thing is inversely proportionate to how much money you have in reserves. 

No reserves? Boom, broken, unrepairable furnace in New Hampshire on the coldest day of the year. 

Plenty of reserves? One light bulb burns out in the microwave.

Do not buy this house. Save up for a decent down payment with plenty of reserves and start your investing experience on a GOOD note.