Hello esteemed redditers in personal finance! I am in the process of purchasing my first home and I have done research online, but I have no investing savvy mentors to turn to so I ask for your advice and wisdom. If you can provide any advice, I would greatly appreciate it, or chime in on any aspect. I am 25 and have a salary of roughly 7k a month, but after taxes and 401k contributions I net 6k a month. I am looking into a multi-family home (4 plex) where I would owner occupy one of the units and rent out the others. Here I will break it down: -Home is listed for 329,990 -it has 4 units (1- 3 br 2 bth, and 3 – 2br 1 bth) -All units are currently being rented as so (1325, 1025, 975, 1100) -I added up utility usage the seller pays and on avg monthly and it came to about 1k a month

I plan on using the VA home loan. I am putting 0 down and hoping to get the place for 320k with closing costs covered, but am calculating at 330k. All the units are definitely habitable and will continue to be rented until I move in (no vacancies for 5 years) but can use some upgrades in the near future. After doing the math this is what I came up with.

-4,425 in cash flow from rental income -I will occupy one unit wish brings it down appx 1000 = 3,425 -Estimated cost for principal/interest/Ins/Taxes is 2200.
-3,425 – 2200 = 1225 – 1000 (utilities) brings cash flow to $225 -Utilizing property management company assuming they charge 10% of the 3,425 collect will cost 345 bringing my cash flow to a negative 120$

From what I've been gathering online, one should keep 10% of monthly rent for projected maintenance and repair costs which is another $400. So while living in a unit I will be looking at about covering $520 along with my own utilities. I plan on staying for 1 year and then leaving, which will allow me to rent out the other space, and after all is said and done, my math has the rental property bringing in $341. Breakdown as follows 4,425 (rental cash flow)- 2,200 (monthly payment) = 2,225 – 1,000 (utlities) = 1,225 – 442 (Property Mangement) = 783 – 442 (Maint. + repairs) = $341.

I have tried to do my due diligence before asking the people of reddit. This is my first big purchase, and I have very limited people who even understand this undertaking whom I can speak to. I have my realtor who I've been talking things through with, but wanted more opinions. If you guys have any advice, tips, critiques or see anything I might have missed then PLEASE share it with me. This is very exciting but also a very daunting undertaking for me. Obviously I am assuming risk, but I am just trying to weigh the pros/cons! Thank you all.

submitted by /u/Princeps94
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