NYC: To buy my home or invest first?
Question for my seasoned investors and mentors. I'd like to get a healthy debate going here. I live in the very expensive Brooklyn/NYC market. I have about 250k in liquid assets and I earn a high W-2 income. I have a family and I currently rent in Park Slope.
My goal is to diversify my income away from my W-2 career and eventually become financially independent one day.
The question is, what should I do first? Buy a home for myself (this will definitely cost at least $1mm for the type of place I'd want) or keep renting my residence and use my money to invest in flips/buy and holds with partners?
Buying a primary residence will wipe away my liquidity but at least put me in the game of building equity and benefiting from appreciation and get me out of renting. It will also get me a much needed tax break from Uncle Sam. It will take me at least 2 years to build up a similar liquidity again. If I see appreciation, taking home equity out is always an option but this is far from a given, especially how late in the cycle we are.
Partnering up and investing in flips or buy and holds gets me into the game of being an investor right away and helps me build a track record for lenders, which opens the door for better financing eventually. However, I'd continue renting and getting no tax write offs against my high W-2 salary.
Before anybody suggests "house hacking" in a multi-family, I've been searching for that elusive unicorn in Brooklyn and Queens for the better part of a year, but I've concluded that multi families are way too expensive in neighborhoods I'd want to live in (I have a stay at home wife and two young children). The rent you make from the rental unit barely makes a dent in the huge mortgage payment and then I become a landlord when I barely have enough free time between my family and job as it is.
So, what do the mentors and philosophers out there say?