2nd real estate investment. One big STR downtown/house hack or LTR's further away?

[Zack Poling]

Currently own a duplex, each side is ran as STR and have been successful. Ready to invest in my next property. Currently live in downtown Indianapolis and plan to at least another year. I don't have a ton of capital but I do have an investor wanting to purchase with me. Trying to decide which strategy I should pursue in my particular situation. I have two houses in mind I think would make incredible STR's. They're both in 550k - 600k range and very close to downtown. Each has a carriage house so I could live in it and STR the house. My plan for the first year though is to live in the house with 3 roommates (they're already confirmed to live with me) and STR the carriage house. I'll have a cushion year to save up more capital and be able to get the carriage house ready for me to move into when I'm ready.

Or 

Should I move further away from the city and buy a cheaper house. The market is pretty flooded with STR's so if I went this route I would LTR. I also would rent somewhere in Indianapolis. I would be able to invest in another property sooner and have put in less capital.

Any advice?