James,
Welcome to BP. Let me put on my personal finance hat first; I'm guessing with your current salary you don't have much financial structure set up yet (and you're doing the right thing heading here!).
My suggestions are as follows, and I follow these steps myself:
1) Try to spend less of your salary (given your situation, the best scenario here is to fully own your own home in my opinion, and I'll address below in more detail)
2) Put 6-9 months living expenses in a high-yield online savings account for emergencies (at $40k pre-tax income this should be $20k or less unless you have lots of debt). Ally Financial at 0.99% is the one I use. Don't tap this account for anything other than emergencies (loss of job, medical, etc... not for new cars) and refill it as soon as you can once tapped.
3) Pay off *all* your debt. With a $40k salary and no mortgage I expect this won't be much, if anything
4) If your employer offers a 401k/403b with a match, invest up to the match amount (free money!). Invest in low cost index funds (like Vanguard total stock market but it depends on what your employer offers)
5) Max out your *Roth* IRA for the year ($5.5k) invested the same as above (not point in investing in a traditional IRA given our tax level -- plus you can withdraw Roth IRA contributions in an emergency without a penalty - but you shouldn't as that's what the emergency fund is for)
6) Split the rest and invest a portion in the stock market (Vanguard low cost index funds!) and a portion in real estate (diversify!)
For more detail on #1/#6: For someone in your position (low salary, 1 time big cash infusion), unlike some other people on this board, I think it's critical that you set up a low-debt income stream vs leveraging up, because you simply can't manage through a rough patch and you could lose it all if you have a couple emergencies on top of each other. Once you've got a home or two up and running and generating income, then you can take more risk, but for now I'd go fully paid off only.
For your personal residence, I'd strongly suggest at minimum a duplex. I hear you that 4 plex can be costly. The important thing here is to 1) get your own home paid off 2) get an income stream, even if it's small 3) get experience owning/fixing/managing a tenant. Strongly consider renting out the excess bedrooms in your side of the duplex as well to further increase income. Do it once and if you can't live with it you can always change your mind later.
Join REI groups. After six months to a year or so managing the duplex and tenants and armed with what you learn from the REI, you'll be in a good spot to buy your next deal.
