OPERATION: Move Out of My Moms House ASAP!

[Brittney Lynn]

Hi Everyone,

I thought positing my situation on the Investor Psychology forum may get some better responses than on the Deal Analysis forum. I am looking to get some insight from those that are more experienced or those that have gone through my situation in past – Hopefully in NYC!

Long story short: I live at home in New York (Long Island specifically) rent free now and have been saving for a place of my own. If I was to buy a condo/co-op in my ideal area in NYC it would end up being around the same price as a multifamily home in a great but not ideal area. Going the condo/co-op route, I would be paying all expenses out of pocket. With a multifamily house, living in one unit and renting the other two, my cost is essentially cut in half.

I read posts from other BP members in different parts of the county that go the owner occupied duplex/triplex route and have their tenants cover all expenses or breakeven but in NYC this is extremely difficult to find for a new investor without $600k in cash. The best deals I can find in the areas I am looking in would have me paying approximately $400 per month if I did not live in the home – aka negative cash flow. This negative $400 may be reduced if I can lower the purchase price of the home but for arguments sake I want to hear opinions on the situation as a whole within the NYC area.

My mindset is that – sure I am living at home rent free, but I need to get out and get my own place. Instead of paying $3700/month for a condo for myself, I purchase multifamily, collect rents, pay expenses and at the end of the month, only end up paying $2000/month. At the same time, I build equity in the house, have more space and have other amenities that I would not get should I go the condo route (off street parking/easy access to city parks). Over the years, rents can be raised and my mortgage insurance will drop off so my cash flow will then breakeven and eventually become positive.

I realize that as an investor this would be a bad deal, at least initially but I am viewing this as half investment and half my home. My second purchase would most likely be out of state (at least NYC) where you get cash flowing deals for less money but for deal number one and my first home I think I need to be realistic here.

I am looking for any insight that anyone has to offer on this subject. I have been stressing out over this for months and just want some advice on what you would do in this situation, what you may have done in the past or what the best thing to do here would be.

Thank you guys so much! J