Making it work - owner occupied multifamily residence in high cost area

[Norm M.]

Hi everyone,

I only discovered biggerpockets yesterday and I've already learned so much! Wanted to bounce some ideas off of the pros here...

I'm a soon to be high income earner (stable, high demand job) who is looking to start out in the westchester NY area (location forced by employment) - I was looking for housing for my young family, but realized that the high cost nature (both housing as well as property taxes) of westchester will make housing a financial sink hole. I eventually discovered MFR's and found some that are priced reasonably (in the range of SFRs that I've been looking at) - these are by no means comparable to the investments you guys put up here (doesnt even come close to meeting the 2% rule). Also - although I am fairly financial saavy (with equities etc), I am a total newbie to the RE market - have been a renter my entire life.

here are some questions for you guys:

1) assuming i will stay in one of the units, I should be able to finance it using the standard ridiculously low mortgage rates, correct?

2) should I purchase this in an LLC for liability issues? i would hate to get sued because someone slipped on ice in front of my building (although i know there are landlord insurances). For financing reasons, would it be easiest for me to buy it under my name, then deed it to a LLC?

3) being in westchester, its impossible to make the 2% guideline work - its more like .92% with some conservative estimates (i think - ie: 2.2% of MFR price in maint&repairs) the rest of the stats are: price/rent ratio: 9%, gross rent yield = 11%, cap rate ~5% - the numbers aren't great - but im just looking for a way to have my 'housing' cost work for me.

4) As with most housing stock in NY, it is an old building - built in 1924 - how much should I be aloting to maintenance? How much for insurance? should I be running away?

5) Since I have no experience with RE, much less landlording - i was wondering if it was worth hiring a PM for a small apartment complex such as this (who will effectively be managing 3 units if i live in one of them) and as far as i know, all of them are occupied currently. If I was to hire a PM, does my role as landlord basically become simply an investor?

6) for what its worth, my income would allow me to comfortably afford the mortgage payments even assuming i collect 0 rent. which should help with financing, and I have enough capital to put down 20%. My plan would be to move out within 1-2 years once my kid grows up and starts school. (apt is in a safe area, but not great schools - its about .5 miles from a commuter trainstation into NYC and walkable to a nice downtown area though), after 1-2 years I anticipate i would need to find somewhere nicer to live (or my wife would kill me).

FWIW, i expect life to be pretty busy the next year or two - with a newborn, a new job, and the requirement to pass some certification exams. - will having a PM be able to defray enough of the time to make this workable? or should I just buy a regular SFR or rent (2k for 2br!!) for a few years until life allows me to landlord?

Thanks for any insights or suggestions.