Hello BP, 

My name is Oz and I am new to real estate investing and need some advice.  

I think before I go into anything I want to tell you a little about myself - I am first generation and have worked hard to get to a point where I am right now. Growing up we never really had any wealth and saw my father and mother struggle trying to support us. I knew I had to go get an education and do better which I was able to do. I have an amazing job but I cannot see myself working for the "man" for the rest of my life and have always had interest in real estate. 

After working and saving as much as I could I was able to secure around $25k into savings and decided I was going to purchase a multifamily in the neighborhood I grew up in. Here's where I need the advice now....

I am in the process of purchasing a triplex in Skokie, IL where the average MF goes for $480k+. Here are the numbers as of now - purchase price $545k with $5k in closing cost credit doing FHA financing so putting down 3.5% which is aprox. $19,075. Total rent coming in from all three units is $4800 currently and it breaks down to aprox. $1600 per unit. However, I believe once I take over and do minor updates about $3k per unit I can raise the my rents to $1750. I should mention the current condition of the building is great and really does not need extensive work.

As it is now my monthly expenses would be somewhere between $3600-$4000 on the high end so it would cash flow about $800 a month. However, since I'll be living in it for the first year or so I'll be negative cash flowing about $400-$700 a month which I am okay with because average rent prices are well above $1200 a month. 

My goal is to live here for a year or two to fulfill FHA requirements save enough money and go either purchase another MF or possibly work on a flip.

What does BP think of this deal? Am I missing something? What should I look out for? Also, how do I calculate my ROI - I've been looking at a lot of formulas out there and need a better explanation.

Thanks!