Deciding between Out of State Investing or a House Hack?

[Jordan Foster]

Hello Everybody,

I am an investor in search of my first deal.  I am a recent college grad with w-2 experience, a good savings, and a substantial income.  I am in the middle of the educational and personal finance section of getting started.  I read a lot, listen to podcasts often, research my area as well as others, and have a strict budget and savings goals.

I live on the Central Coast of California, where the average home price is close to a million dollars.  Ideally I would like to house hack to eliminate my rent expense and gain hands on experience managing my first property.  However, with home prices this high, it will be very difficult to find an affordable deal.  Even if I do, I am not sure how this will affect my future ability to get loans based on my debt/income ratio.

I have started to consider investing out of state.  I have done some research in several markets across the country that look appealing.  Even with continuing my rent expense, I would still be able to purchase about 1 property/year to get the ball rolling.

Does anyone have advice as far as what would be a wiser approach?  Thank you!

If you are an investor on the Central Coast or specialize in investing out of state, I would love to get in contact and learn more!

[Caleb Brown]

I would say house hack. Main reason is the appreciation bonus with that area. Long term wise it'd be a great investment that you can use to hold for 5-10 years or 1031 after a couple. In time if you held it you could tap into equity and use that for more deals. After you get a house hack you could look into buying an OOS property and start building a portfolio.