My plan was to keep the condo as my residence, but after a year, refinance to fund a down payment on a multi-family property, either out of state or in the surrounding NY area.

The deduction is optimized as values increase and can potentially offset the entire net investment (including down payment) for high wage earners.

@Mitchell RosenbergAnother approach is the elimination method.

Have you considered tapping into your existing rental equity for the down payment?

BRRRR method is also a great way to go - good luck!  

There are down payment programs for duplexes, i have not searched or tried to do a 3-4 unit property. 

I think this is the method I would like to go as it fits in line with what I envisioned. 

However, finding properties that would cash flow with a 20-25% down payment on 400k property has been challenging.

Used houses in the area sell anywhere from $75-125 a square foot.These are long term rentals that I do not plan to sell.I am reading the Rental Property Investing book and implementing the method that focuses on cash flow and that strategy states you need to have $300 cash flow per month, per property.

I’m close to saving up for a down payment but it’s taking forever!