Live in one unit, rent the others

Buy a 2–4 unit home, live in one unit and rent out the rest. You get home-loan terms, and the rent helps pay the mortgage.

How it makes money

The other units’ rent pays part of your mortgage, so you live for less than you would renting or owning a single home.
Each payment pays down the loan, and the property can gain value over time.
Later you can move out and keep it as a full rental, then buy your next home the same way.

Cash you need to start: Your down payment, closing costs and the reserves your lender requires.
Worst realistic outcome: A unit sits empty or a tenant stops paying, and you still owe the whole mortgage on the home you live in.
What you keep owing: You owe every loan payment, tax and insurance bill even when a unit is empty or repairs run over. If you can’t pay, you can lose the property and the equity in it, so you can lose more than the cash you start with.
How long a first deal takes: Months: pre-approval, a search, then a closing like any home purchase.

Home-loan terms (FHA, VA, conventional) require you to live there; FHA expects you to move in within 60 days and stay at least a year.
Lenders count only part of the other units’ rent, and an FHA loan on 3–4 units must pass a self-sufficiency test on the rents.
You live next to your tenants: screening, rules and repairs are personal.

Read the traditional financing lesson: FHA and VA loans for a home you’ll live in.
Talk to a licensed loan officer about pre-approval for a 2–4 unit home you’ll live in.
Save for closing costs and reserves. An FHA loan on 3–4 units needs three months of payments left in savings after closing, and the rents must pass FHA’s self-sufficiency test.
Learn your state’s landlord-tenant rules and any local rent rules.
Find a buyer’s agent who knows small multi-unit homes.
Run the numbers with the rent from the other units, including vacancy and repairs.
Get ready to be a landlord: screening, leases and repairs.