First Post, First House, Expensive Area.

[Bradley McVay]

Hello BP Community,

I have been a fly on the wall for a long time and now I am finally posting. within the next year or so, I am going to purchase my first home with my soon to be wife (not engaged yet, so don't tell her). I am fresh out of college and 25. Here I am trying to pack in 3-years' worth of questions while being concise. The overarching question I have is what strategy to start out with. I have focused on House-Hacking for most of my educational journey via books, podcasts, YouTube, etc. Now, I am not so sure. Recently, I have been wondering if I should pursue a SF live-and-flip or a BRRRR. I know you can do a mix of these strategies; I would just like to narrow my buy box. Here is the question broken down for my situation.

Before I dive in, it is important to note I will have around 60-70,000 dollars saved when it comes time to get approved for a loan. I also have very good credit due to my dad putting cards in my name. 

Long-Term Strategy: I would like to slowly and safely scale my portfolio that consists of small MF and SF homes in good/great locations. Since I am thinking long-term and not trying to live off cash flow, location is pretty important for me and my girlfriend. 

Option 1 (preferred): House Hack 2-4 unit MF House

In Portland right now, a duplex is anywhere from $400,000-$700,000. triplex/fourplex is even more. I understand the goal should not be to cashflow when you are house-hacking. But running the numbers as if I was renting both/all units, the houses are not coming close to breaking even. Since I am living there, I would be fine with just cutting living expenses and building equity. However, scaling will be difficult if I am dumping money into a house and not being able to save. 

So, I have come to the conclusion that I will have to add significant value to the units in order to raise rents and force appreciation. This is where I ran into a problem with my long-term goal of finding good locations. The supply of value-add small multi-family properties in C+ up to A neighborhoods is practically non-existent. That is my experience at least. Please correct me if I am wrong. 

Option 2: Live-and-Flip or live in BRRRR

The reason I have been thinking about this more is due to my long-term plan for my portfolio. I switched from obsessing over cash flow and now am trying to find great locations that will be a secure investment for years to come. SF homes are much more affordable and there is also a lot more inventory. This is especially true in quality neighborhoods. For this option, I was trying to find one of the worst houses in the best neighborhood. This would obviously allow for the most appreciation and be the safest investment long-term. 

The problems arise when it comes to experience, construction prices, rehab funds/estimating skills, etc. I just feel like a lot could go wrong with this strategy. I do not think my girlfriend would be comfortable if we eventually rented out the rooms. That means, we would be relying on the ARV to pull money out in order to move to the next house. Without cash flow while we're living there, I am worried about paying the full monthly payment while trying to renovate.

I apologies for being long winded but there is a ton of stuff I would like to discuss. Please do not go easy on me. Correct the fallacies I may have, or if idealogy is all wrong. I am new to this and just want to take advantage of starting young as time is the best multiplier. 

Thank you.