I wish when I was younger and a little less set in my ways, someone would have advised me to buy a multi-family home for my first purchase.
Why, you ask?
Two words: financial benefits. When you buy a multi-family home and treat one of the units as your primary residence, you receive an Owner Occupied Mortgage Rate instead of an Investment Property Mortgage Rate; the interest rate difference between the two is considerable. You also do not have to invest the 25% or more that is required for investment properties because it will be your primary residence. The established income from the other rental units at the property will go towards your monthly mortgage payment and will help build your equity in the property.
Since you will be living at the property, you will be in a much better position to manage and maintain the property. After one year from the time you purchased the property and signed the Note and Mortgage, you may rent out your unit. You are required to live at the property for at least one year otherwise it would be considered a default under the Mortgage Agreement. After several years in the current market, you will have built up enough equity that you could refinance your home and take funds out the house to buy a new one and keep the current home as an investment property.
In order to do this however, you must have the perseverance to be a landlord. As rewarding and profitable it may be, there are many financial risks (and you may suffer many a headache). I speak from experience.
We lived through a Hurricane-Sandy-flooded investment property. We rebuilt it, learned how to tear down sheet rock, argued with the Building Department, thwarted gougers, discovered that flood insurance does not replace cost-value, and most importantly, learned how wonderful mankind could be. So many volunteers helped us. It was heart-warming! At the end of the day, the right property can be worth the hiccups.