Punching Above my Weight

[Kahleb Kelsey]

Hey Guys!

I've posted a couple times on here before looking for input, and I'd love to ask again for all and any advice. 

I am in the military and bought a duplex to househack in northern California when I was stationed here. That decision was the best I've ever made, and the duplex has performed incredibly and allowed me to build wealth and reserves for my next property. I would like to continue buying property, and through some refinancing strategies I will be able to re-use my VA loan, however any single family I analyze doesn't pencil out, and the one multifamily that would work for my family and I feels like a big risk, which is where my dilemma comes into play.

The property I'm looking at is a triplex with units that more closely resemble townhouses than apartments. It is in a very desirable area with high rents and is in pretty good shape, but it is expensive. Without going too far into details (I'll provide them below) renting out two units and living in the third would result in a net mortgage payment of around the max I can support with my housing allowance. When I do move out and rent out my unit, I will be breaking even in the best case scenario. It feels like I might be punching above my weight here, and taking on too much risk. Should I play the long game and wait it out and struggle through the first couple years since this area will definitely appreciate and rents will grow? Should I wait for another prospective property? Should I give up and just buy a single family? What do you guys think? Thanks in advance!

Details: 

Asking Price: $1.9M

Current rent per unit: $3100/month

Unit details: 3 bed/2.5 bath, 2200 sqft, two car garage, very nice on the inside, built in 1980