Advice for Inexperience Investor

[John Malsbury]

There are probably dozens of these posts on this site, so I apologize ahead of time.

I am a new investor, and I am looking into buying my first rental property. While I've always had my eye out, I hadn't really started to consider things seriously until the past week or so.

the basic story is that I've come across a handful of low priced du/triplexes in my area. My basic strategy is to buy a property that can maintain positive cash flow. I do not want to depend on appreciation, though I do expect to see some "appreciation" merely because of the deal I am getting.

So, what I am hoping to invest with is 10% down, while some of the banks I have talked to are asking for 25%. So, we assume I am putting down ~$5000k, I think I can get about $2k-$3k of post-tax cash flow with the rental rates and expenses I have estimated. So, in terms of raw ROI, this is good property..

BUT... Since my wife has recently finished school and found real time employment, we are clearing $110k of income. So, while the ROI looks good, the total cash flow isn't a significant difference. We currently have $35k in retirement accounts, but only $11k in cash/stocks(purchased a home and single income for the past 2 years). At this point however, we do accumulate about $4k in "savings" per month, aside from retirement accounts, so while we don't have a lot of cushion, we should be building it up pretty fast. Another factor is that I expect inflation to increase over the next few years, and if I buy I want to do it now...

So I am asking for some general, philosophical advice...
For someone a couple years out of college, what should I expect or aim for with my first property? I see a good ROI, which may justify the investment vs. putting it in stocks. However, the net income is only a ~2% increment in what we make in our occupation. And in the real world this isn't really "passive" income, like a stock investment would be. This investment is going to take some leg work... So my real metric is $/hr, because I don't want to make making a lower "wage" than I do in my day job. Should I just accept this as my education in real estate investment, and not expect huge gains? I feel like I want to take the plunge just so I can get over the nervous nous of owning rentals. Should I be willing to accept this education, even if I lose a little bit of this money?