The typical path to a million in net worth is to go to college, save money (frugal with expenses), buy a house, and invest in tax deferred accounts. 

The issues on the inspection report were few and mainly related to safety which speaks to the quality of the rehab that was done (e.g. no expensive CapEx items). 

Is it worth going through when the average yearly rate of s&p is about 10%, which is pure passive income?

Smart investors increase earnings, reduce expenses, increase savings, and buy wisely.

Definitely consult a local attorney as it can be expensive if she really has a case.

The other two options require spending money that is basically going out the door to lots of fees and expenses of exiting your current house and getting into a new one.If you were just looking to move, that is perhaps a different story… If your house isn’t working for you, for instance.

I have investigated several out of state markets and have not found anything that I like better than what I am investing in now when comparing overall income, expenses, and the potential for appreciation.

Now that it's a rental the home barely cashflows due to expenses and the high mortgage.

If so, would this allow me to deduct rental expenses below the amount of your rental income?

I was wondering if anyone can give me some information/guidance if getting into house hack in NYC (expensive market) is doable or what kind of asset class is better for this area.