Hey @Nathan Gilbo
The strategy you are proposing is exactly how I started out and it worked fairly well. I stayed in the duplex I purchased with an FHA loan for a little over a year and then moved to a different home for my primary residence. After that first FHA loan you are going to have a hard time finding a lender that will offer any fixed-interest loan product with 3.5% or 5% down if you live in one unit of a 2-4 unit multi. This echoes the point that Nathaniel made above that the second property is going to be a bit tougher or at least take more down payment.
For most 30-year fixed conventional loans tied to investment properties you will need the following
Downpayment
4 loans and under
Single Family = 20%
Multi Family (2-4 units) = 25%
5 loans to 10 loans
Note: you will not be able to perform cash out refinances of these loans which could be a big hit depending on your strategy.
Single Family = 25%
Multi Family (2-4 units) = 30%
Reserves (Bank likes to see some funds in case of a rainy day)
4 loans and under = 6 months PITI reserves for the property you are purchasing and 2 months PITI for the other rental properties you own
5 loans to 10 loans = 6 months PITI for all properties
Credit Score Requirement (sure this moves around with time and different lenders)
4 loans and under = 620 credit score
5 loans to 10 loans = 720 credit score
Lower the score is to the threshold the higher the interest rate.
I am not a lender and everything written above is what I experienced over the past couple years with 3 investments and 1 primary residence properties tied to 30-year fixed interest loans (1 FHA and 3 Conventional).
Best of Luck,
Scott Dixon