Buying a Duplex in NY then investing out of state

[Will Stahl]

Hey BP Community, 

I wanted to take the time and outline the strategy for my REI here in the forums and hear feedback from the community to see how I can improve my ideas. Some quick background on me - I'm 24 years old, live and work in Westchester County New York which is about 30 minutes north of NYC. I'm coming up on 2 years at my current job and am finally starting to compile some savings. I briefly considered buying an out-of-state investment property first, but have shot that idea down for several reasons which I lightly touch on below. This is my current thinking and game plan....

Buy a duplex in Westchester county for roughly ~250K - 325K with roughly 15% -20% down. That puts me in a position where I could still afford the monthly payments (Taxes and everything included) even if I experienced vacancies or something awful like an eviction. I notice that there are a fair amount of 3BR/2BR Duplexes in the areas I'm looking at which would be perfect since I could rent out the three bedroom and live in the two bedroom. The three bedroom rental would largely cover my expenses  (if not fully cover them) but I would also be looking to rent out the 2nd bedroom in my unit which would  allow me to cash flow a few hundred dollars a month. Having the 3BR/2BR would give me the flexibility to move down to the three BR unit if I end up eventually starting a family. In that case I would then start renting out the 2BR. Once I'm living rent free in the duplex I would be saving a lot more money. Not just from what I'm cash flowing but from not having to pay rent! This is when I would like to start buying properties out of state with a focus on cash flow.

I'm curious if anyone has any tips/suggestions based off of what I wrote above. There's a few things on my mind in regards to my situation that I'll list out in bullet format below.

• From my understanding I can write off the interest of my 1st and 2nd mortgages. So buying a duplex in New York first, rather then buying an out-of-state rental property first, is the right call since it will give me the bigger tax savings compared to buying a cheaper rental property out of state. (It'll also allow me to live rent free)
• I believe certain mortgage, such as the 203k, require you to live in the residence for a set amount of time. This is an option that could come in handy.
• It would give me some experience with loans, buying and owning a property, and being a landlord.

If anyone has any tips/suggestions/comments I would really like to hear them.

Thanks in advance everyone,

Will