Save for First Home or Invest?

[Elsie Wong]

Hello,

My name is Elsie and my husband and I have been learning/reading about real estate investing now for months, and feel ready to start investing. We have connected with an out-of-state real estate agent in the Indy area who has helped us tour leads (super fun!), as well as a local lender who has walked us through the math on a couple properties we were interested in. We're interested in out-of-state b/c we currently live in a HCOL area, but want to get started ASAP, which means looking at more affordable markets to start gaining experience.

We however consulted our financial advisor a couple times, and have received push back on doing out-of-state real investing for a variety of reasons, including 1) we are currently renting in a HCOL and are saving up for our primary residence buy which is in another HCOL area (LA as want to be closer to our parents when we consider having kids, so this is a bit non-negotiable), which we aim to have enough funds for by end of 2024, 2) we have a fair amount of student debt that we want to aggressively pay off once loan payment freeze ends in 2022.

Wanted to share our situation with the forums here and get some feedback. We currently have a couple nest eggs that we could tap into for startup funds, but our financial advisor has advised against tapping into those, naturally b/c it sets us back in those other life goals (which makes sense). She has recommended us considering in-state investing, but we are nervous investing in CA given how renter-friendly it is.

Our philosophies for starting now are 1) we want to achieve financial freedom/escape the 9-5p in our 40s by building a strong passive income real estate portfolio, 2) we want to start gaining experience now/we've only heard anyone's regret ever being that they wish they started sooner, and 3) we sense that if the math works, the math works (and not with rosy numbers, but with very realistic numbers with plenty of risk baked in like vacancy, maintenance cost emergency fund, etc)

Thanks, really looking forward to some constructive feedback/conversation! We've been really struggling with this conversation for a couple weeks now.