First time investor! Mid twenties looking at multiplex

[Raj Patel]

Hey guys! I have been creeping on this forum for a long time. I am so impressed by how experienced and knowledgable all of you are. A lot of the internet is full of people talking about subjects that they aren't very versed in. This place is a community that continues to impress.

So when I finally got to looking at my first buy I figured I would try to utilize all of your experiences for my own selfish use. Any advice or feedback would be greatly appreciated.

I currently rent a house for $1000 a month. It breaks my heat to look at my landlord's mortgage bill come in at the end of the month. I get to see how much money he is making of of me! It's terrible!

So I found a multiplex in an area that is growing. A 700million dollar revitalization project just began a couple of blocks down from it, so I'm sure the lot will appreciate a lot over the years. But that's isn't the immediate question

There are four units on the property. In this area each one can go from 500-600. It is going for 130k. I think I can seal the deal for 130 including closing cost. The property needs A lot of work. It is from 1940. But I don't mind living on the property and fixing it up as I go along. I don't expect to see any sort of return for several years, but it seems nice that other people will be paying for my property for get better.

If I were to finance 100% of it the P&i would be just about 1000 for 15 years

I'm trying to apply the 50% rule. It seems that if I can rent each for 500 and kick in 500 for my unit, then I could have 2000 each month. The P&i is 1000, so that falls right at 50%. I do not think the 50% is supposed to include insurance and whatnot but I could be wrong. 2k falls short of being 2% total cost though.

Do you guys think this is a bad idea?? Like I said I don't mind not making money, but I don't want to lose money! How logical is it to think that I can pay for repairs with rent.

Is there something I'm missing? How do I insure something like this??