Advice on owner occupied NYC multi family search

3 Replies

I own about $750,000 of stock in a single company that I would like to liquidate in the next year or two (I was an early tech company employee). I am also paying about $4,000/month in rent and need more space (growing family). 

Someone told me I should buy a multi family home and occupy one of the units. It sounded like a good idea but I have 0 real estate investing experience. NYC also seems like an unforgiving market which might be too risky for my appetite. 

I’m hoping for some advice on how I might theoretically think this through (ignoring my lack of experience in real estate). I do have extensive experience in data analysis, finance, accounting, and my wife is a non working attorney. So there should be “some” translatable experience at least. 

1) Should I just drop this idea altogether?

2) If no, what would be a good first step?

3) with $500-750k cash (and willingness to come out of pocket $4,000/month) how would I think about what I can afford?

4) any other advice is welcome

Hi Paul, Welcome to BP! Here are my thoughts:

1) I work with many first time buyers and first time investor buyers and obviously none have any RE experience. It sounds like this is something you could handle just fine considering you and your wife's experiences.

2) Speak to a realtor experienced working with investors to help narrow your focus, pre-qualify you, etc.

3) Off the top of my head a multi-family purchased for around 1.2M with 35% down would cost you around 4K per month for mortgage, taxes, and insurance, and that wouldn’t take into account any rental income, and it would also leave you a good amount of cash post close. I'm sure there are many different ways you could go about structuring this.

4) For growing families, things like ROI and cash flow often take a back seat to quality of life factors. Think about proximity to family friendly amenities, parks, schools, childcare, etc.