Most first-time buyers I talk to run the numbers on a 2 to 4 unit building as if it were a pure rental. The deal looks thin, and they stay on the sidelines.

Here is the part nobody explains. If you live in one unit, the right comparison is what it costs you to live there versus what you pay in rent today.

A quick example with round numbers. On a $600,000 2 to 4 unit building you live in, a regular loan can go as low as 5% down, which is $30,000. Add up the mortgage, taxes, insurance and a monthly repair fund. Subtract the rent from the other units. What is left is your housing cost.

If that number is close to what you pay a landlord now, you get the same roof plus a building that your tenants are helping you pay off.

Two things we check before every offer:
1. Real rents for the other units, from current listings nearby, not the seller's sheet.
2. A repair fund set aside every month, because older buildings use one.

For those of you who bought your first small multifamily to live in: what number told you it was a yes?