Welcome to the wild, exciting world of RE investing, Drew! In my opinion, going straight to the 4plex is the winning strategy. Life tends to be a constant game of meeting and changing expectations and when you take the first step in RE investing as, "I'm going to move into this 4 unit" you're stepping off with a great foot AND you are using the "silver bullet" of low down-payment financing the best it can be used.
The primary additional benefits I find with 3- and 4- unit properties is diversification and economy. In my market (Oklahoma City) you can live "cost free" (tenants cover full cost of principal, interest, taxes, insurance, and any covered utilities) in a 4-plex all day, sometimes in a 3-plex, and occasionally on a duplex. What that means AFTER my owner-occupied stage is that the property is breaking even at 25% vacancy! You should be able to keep vacancy significantly below that, so we're looking at very cash-flow positive property once you move to something else.
So, why not jump in with the most efficient use of the loan and the opportunity, have built in diversification and cash-flow? If it's going to be a bear, it might as well be a grizzly!
One last thought: I'd recommend factoring 9-10% for property management. This is likely to vary from market to market, but I'm seeing an increasing trend of PM companies offering 7-7.5% fees and their clients run to my company in droves because . . . well . . . you get what you pay for? If the numbers on the investment work at a 10% management fee and you can find a stellar PM at 7%, or even less, then that optimizes your numbers even more!
-Will
