R.E. Newbie; Buy/Live in SFR or MF?

[Aram Kuzmak]

Hi Everyone,

This is my first post on BP, but I've been reading posts and articles for a while now. Anyhow, here's the scenario: I'm debating on whether or not to make my first RE purchase 1) A 2 or 3 Unit that I would occupy and rent, or, 2) A SFR in an up & coming area, which I would live in. I'm trying to not make the emotional buy, but it is the type of space that I've always wanted.

About me: 

- 36

- Single (long-term GF)

- Upstate NY 

- $60K Annual Income

- 0 Debt & 800 Credit

- Around $100k in savings (liquid)

- Currently renting for wayyyy below market ($800 split 2 ways, Utl included,  garage, 1,500 sqft)

The SFR is $150k w/ property taxes of $3000. That said, it's currently assessed very low, so it's likely that taxes will jump in the next few years considerably. This property is in a "hip" area, and may see appreciation in the next 5 years. It's an 1,100 sqft loft style home, with a large garage on the first floor. It was fully rehabbed 10 years ago, so maintenance shouldn't be too extreme. If I chose to move from here after buying it, I think I could get enough rent to just barely cover the mortgage, tax, and municipal utilities ($1,200).

An example of the MF I'm looking at: $170,000, 3-Units; 1 3br, 1 Studio, 1 2br, with $925, $550, and $1,000 rents respectively. I would occupy the $1,000 unit, leaving $1,475 in rents to cover the mortgage. Owner pays heat and hot water. This property seems less likely to appreciate in value than the SFR for a variety of reasons, but would be seen as an asset by most regardless of that fact. I estimate that large repairs aside, the 2 rents listed above would cover my mortgage, tax, and most of the included utilities.

I would be looking to use a 10/1 ARM for either purchase, but am open to other options.

PS: I'm a car guy, and having a garage means a fair bit to me. That said, I'm not naive to the fact that i could simply defer that requirement for a year or two in order to position myself better financially.

I need some guidance here as a first-time buyer, and would appreciate any input. Thanks