Taking the Plunge or Saving? First Time Investors

[Taylor Matthews]

Bigger Pockets Community,

TL:DR - buy now or wait to accumulate bigger safety net.

Two fresh real-estate investors to-be would greatly appreciate your feedback. 

My roommate and I are fresh college grads who are going to be making the plunge and buying a house fairly soon here. We both have strong desires to achieve financial freedom and passive income. We've really hit the BiggerPockets Podcasts hard and have been trying to internalize as much as possible over the last few weeks.

I am a working professional in a fairly high paying sales job and have mentally committed to taking the plunge. I spent some time in a commercial real estate internship where I learned a bit about multifamily and commercial properties and that first sparked my interest. Since then I have acquired a full time, fairly high paying sales job and have been looking into getting out of the rat race. Current capital amounts to roughly 15k in capital with the potential to receive "gift" investment from my parents. 

I have been working with different lenders and have found one who would be willing to fund a deal with 3.5% down under an FHA backed loan.

My roommate's situation is lined up, but not quite ready to fly. He was fortunate enough to graduate with no student loans and drives a beat-up 99' Corolla, meaning no car payments. He lives frugally and recently was promoted to the same high-paying sales position which will net him around 50k of savings a year. He also has about 10k of current capital to offer.

Do we make the jump now on a duplex deal I found in my area. (We live in the bay area so property is ridiculously expensive)

The duplex is a 3/2 and 2/1 property that would rent at market rates of around $2,500 and $2,000 respectively (This is based on market research and my agents own comps for the area). Using the bigger pockets calculators I have found that this would cashflow over $600/mo with current market rents at the asking price if both units were rented. (I'm almost positive I've gotten the numbers right. I've checked them with my agent as well and it seems to check out. In fact she mentioned my numbers may be too conservative.) With us living in one unit that would cut out our $2,000/mo rent however it would drop our current rent from $2,000/mo between the two of us (what we pay at our current residence) to just under $1,400/mo after all expenses. 

This would effectively bring down our monthly payments AND give us equity in a rapidly appreciating market.

I believe that we should make the jump now, after closing costs we would be left with very little capital however due to the nature of our positions we should have a good chunk of change as early as January to put into repairs. I hear the end of the year is the best time to buy and that is one of the reasons I am adamant on trying to close something by the end of the year.

Or do we hedge the risk, wait a year to accumulate a more comfortable amount of capital and start the search then.