Just Starting Out: Condo/Townhouse vs waiting to save on SFH

[Danielle Tran]

Hello Bigger Pockets Community,

I would really love to get the advice from those who understand the Orange County, California market. I am just starting out and would love to invest in a property here in Orange County, CA. I have saved up enough to qualify for a condo/townhouse. I would love to invest in a single family home or multifamily property however I am unable to afford that at this time in this location. Since this will be my first property, I would prefer not to ask family or friends for help financially. I would start off with either house hacking or use an FHA/conventional loan where I live in it for one year and then rent it out after. I know it has been mentioned many times to not invest in a property that has an HOA however if I purchased a condo/townhouse, all of them comes with HOAs. I found a townhouse that has an HOA half the amount as all the other townhouses around the area. I am debating if I should jump on this opportunity to finally get started in investing in real estate or wait and save money for a single family home without an HOA. I keep hearing in my head "Time in the market is better than timing the market." I also don't want to become "house poor" if I choose to invest in a single family home. Would love to hear your opinions. Thanks!

[Danielle Tran]

@Josh Alexander The only reason why I am considering OC is because I would like to use the benefits of a primary residence rather than a vacation/second home. Whenever I run my numbers, it always isn't the best in terms of cash flow. The only reason why I would still consider purchasing a place in OC that doesn't have good cash flow is because I hope appreciation later on will suffice. I also know I would want to live here for many years.

I have considered purchasing a property in Las Vegas instead as the same amount of money I use to purchase a 2 bedroom condo can be used to purchase a full two story house with 3-4 bedrooms. However when researching the market and speaking to other investors, they say the rentals do not increase as much as price of homes. I have been in limbo of where I would like to purchase my first property.