Buying Multiplex while Renting?

[Malik K.]

Hello,

I am a first time investor. I was originally considering house hacking with a multiplex (and I have over six figures I could put for a down payment) in Philadelphia but it seems that the only places where I could cash flow right now would be in far west philly or in neighborhoods that are boring or not so safe, would be a longer commute to work areas, etc. 

In this scenario does it make sense to buy a triplex or 4plex in a less desirable/up-and-coming neighborhood , rent all units out while I continue to rent in center city/fishtown/UCity/NoLibs? 

Many thanks in advance! 

[Jon Schwartz]

@Malik K., don't forget to factor in the cost of your rent in your calculation.

For example, house hacking a multifamily in a desirable part of Philly might not cashflow, but is the reduction to your cost of living greater than the cashflow from an investment property in a bad part of town?

Also don't forget that you can house hack a multifamily with 5% down, but buying a multifamily as an investment property requires 25% down.

Good luck!

Best,

Jon