Advice Requested: SFH or Multi-Unit in San Jose?

[Lawrence Cole]

I'm currently looking at investing in San Jose. My initial strategy was to purchase a mult-unit locally, knowing that returns would be break-even to low, just to move into a fixed-price cash outlay while building equity; then invest in other markets like Philadelphia and Atlanta where I have friends, family and would get better returns starting next year. 

One issue that I am running into is that based on home price inflation since 2012, many of the duplexes that I am looking at would require mortgages where the current market rents would barely maintain if not be slightly in the red. I don't plan on buying anything that does not at least have me in the black from day one, even at a meager return. My girlfriend is suggesting that buying a single family home and selling in 5 years may be a better option. At the same time, experts are saying that the economy is due for a big flip within the next couple of years.

I'd love to get some informed advice on what would be the best option for this first purchase in my market considering my longer term strategy.