How do I rationalize owning my own home in SF???

[Robert Stillwagon]

Is it possible to purchase a multi-family unit in the SF Bay Area and have it make financial sense in the next 6 months OR is it better to keep renting and use that money towards an investment property in another market?

Context, I hear about the pros and cons of renting vs. buying, but most articles make it sound like using an FHA loan to buy a multi-family unit makes more sense as an investment. However, I'm struggling to make "the math" make sense. In SF, the max limit for a multi-family unit is 1750,000.00 which already cuts down the market. But also, at $1M the 1% rule makes it sound like I'd need to find 10,0000 worth of rent on a 2 unit property for it to make financial sense. Can someone help me understand?

Are there areas where owning a multi-family unit (and qualifying for an FHA loan) makes sense near SF?

If the above isn’t feasible, my plan is to invest in a rental property in a less expensive market.

How do i factor in the cost of renting vs. paying more on my own property?

Any help is much appreciated.

[Darius Ogloza]

I would recommend you focus on total return over a relevant time period rather than on the first' month's cash flow.  

Here is a real life example:

I purchased a SFR in SF Bay Area for $445,000 in 1999. $1,600 square feet on a 1uarteracre lot in a good school district in Marin County. Today it rents for $5,500/month and will likely sell within 2 weeks for $1.6-$1.7 million. I purchased an "inexpensive" SFR in Western New York in 2004 for $180,000. 1,800 square feet on 3 acres in a great school district. Today, rents for $1,700-$1,800 and will sell likely within 60-90 days for about $250,000-$275,000.

Which of the two investments made more sense?