@Nick JonesYou are not land locked to NYC prices, there is no rule you need to invest in your backyard.Don’t get me wrong it’s convenient to be able to drive to your property but not a most.

Maybe on the high end but there are other factors to consider.

@Russell Brazil thanks, I'm probably naturally a bit more conservative that many, so I try to think about different risk factors. 

But these all factor into your decision.

Location is the biggest driving factor. 

Here are my quick numbers on the deal:$1,600 gross rent-$570 ish for mortgage-$160 for management (10%)-$128 for maintenance (8%)-$128 for CAPEX (8%)-$128 for Vacancy (8%)=$486 month or $5,832 a year (12.9% CoC)Then you still need to budget for Taxes & Insurance, this would drive down your return further.

You have to consider number of factors before doing this, the property would have to be appraised and would be added to your income for the year in which you make the distribution, likely pushing your tax bracket up.If you simply wish to get into self-directed investing you may want to consider truly self-directed Solo 401k, it has number of advantages over SD IRA such as contributions limits 10X higher, no need for a custodian, checkbook control, exempt from UBIT on leveraged real estate and more.

Many of those investors are paying cash and, to them, the numbers look fine since they're not factoring in the lost opportunity cost on their money.

Then they only need 7 days for an appraisal and final approval of the loan applied to the selected property.Some other approaches that we have had success with is Driving for Dollars, seeking out as-is properties, and properties that have been on the market for 30 days or more.

So far I haven't been able to find a bank or credit union who's willing to put that on paper with one of the biggest factors being my self-employed status and only having one years worth of taxes at the moment.