How to choose a location from the US?

[Mike Tikh]

Currently stuck in analysis paralysis on trying to find the right location for a first property, with a willingness to move anywhere in the US. 

Goal

My objective would be to go with a MFH, 2-4 units, higher would be better. I'd house hack and live in one of the units the first year, and use an FHA 3.5% loan. For amount, it would likely be in the $500-700k range.

My expectations are to have a negative cash flow while living there, and possibly a slight negative cash flow after moving out (until interest rates lower or rents increase). For example, a $650k 3-4 unit where each can rent out at $1,500, allowing for a negative cash flow of $2-2.5k/month the first year.

Possibilities

Given those goals, it would rule out the more expensive places (California, Seattle area, Austin). However, I have no idea how to choose from the remaining cities, it seems there are a lot of potential options:

- Midwest - Michigan (ie: Grand Rapids) seems to have options, also seeing Columbus Ohio and Indianapolis coming up

- Reno - I've seen mentioned several times on here

- Pittsburgh / Philadelphia / Twin Cities - All mentioned as lower cost to get started, and seem to be experiencing growth

I'd ideally like to find a place that has strong potential for future growth, a diversified economy, and I don't mind living in (being close to nature would be a plus). 

Any thoughts on how to choose - what metrics to evaluate, resources to read to help?

[Evan Polaski]

@Mike Tikh, if you are going to live there, travel there and see which one you like.  

For a house hack, whether in a new market as you are noting or for people local, you need to find a place you want to live.  

I have not been to Reno, but climate is probably closer to what you have in Austin.  

The others will be cold, grey and wet from roughly November to March/April.  I know this isn't helping you narrow down your list, but only you can really do that. You can be successful buying small multis in any of these areas, you just need to learn them. 

What are the different neighborhoods like?  What are people in those neighborhoods looking for?  What is considered a good purchase price for that area?  

And then diving deeper, i.e. I love in Cincinnati, my pocket is very nice, but not a rental market.  The next neighborhood over (literally across the street) is pretty nice, but falls in a different township that has higher property tax, and then the next neighborhood (about a 4 min drive and 15 minute walk) is much lower end, and while fine class C-ish area, you can't push rents much, and the village has its own income tax, so you will pay 2% of your net to the village...

But back to first comment: take 4-5 days and travel to each.  When you pick one, rent an apartment for 6-12 months and figure out where you want to be.  Spend time around different neighborhoods.  You are going to be living there, so you might as well pick a place YOU want to live first.  Then live there before you start buying property.

[Remington Lyman]

Quote from @Mike Tikh:

Currently stuck in analysis paralysis on trying to find the right location for a first property, with a willingness to move anywhere in the US. 

Goal

My objective would be to go with a MFH, 2-4 units, higher would be better. I'd house hack and live in one of the units the first year, and use an FHA 3.5% loan. For amount, it would likely be in the $500-700k range.

My expectations are to have a negative cash flow while living there, and possibly a slight negative cash flow after moving out (until interest rates lower or rents increase). For example, a $650k 3-4 unit where each can rent out at $1,500, allowing for a negative cash flow of $2-2.5k/month the first year.

Possibilities

Given those goals, it would rule out the more expensive places (California, Seattle area, Austin). However, I have no idea how to choose from the remaining cities, it seems there are a lot of potential options:

- Midwest - Michigan (ie: Grand Rapids) seems to have options, also seeing Columbus Ohio and Indianapolis coming up

- Reno - I've seen mentioned several times on here

- Pittsburgh / Philadelphia / Twin Cities - All mentioned as lower cost to get started, and seem to be experiencing growth

I'd ideally like to find a place that has strong potential for future growth, a diversified economy, and I don't mind living in (being close to nature would be a plus). 

Any thoughts on how to choose - what metrics to evaluate, resources to read to help?

I recommend visiting a few cities to see which one you like best. I moved to Columbus, and I'm enjoying it here. Philadelphia is also an amazing city. However, I wouldn't want to live anywhere in Michigan because of their college football team.

[Joe Hammel]

Metro Detroit has what 99% of Real Estate Investors want. Couple hundred bucks a door monthly cash flow, solid ROI, and yes plenty appreciation. (#1 appreciating city 2023)

I know many investors that have house-hacked with your exact criteria and done really well. 

It's a great market to grow your investment portfolio afterwards if you choose to do so.

I personally make well over $100k/yr cash flow from 21 properties here. All of which, I’ve purchased within the last 4 years.

There are 2 types of people who dog on Detroit..

1. People who don't actually own property in Detroit

2. People who did it wrong and weren't able to execute.

If you do it right, it’s arguably the best market to invest.

Purchase: $80k-$130k

Rent: $1100-$1500 (no rent control in MI)

1% rule: .9%-1.4% rule deals

Coc ROI: 5-12%

Total ROI: 20-40%

Cash flow: $50-$250/door (after all expenses and budgeting for maint, capex, vacancy)

Appreciation: 3-10%+ (has been double digit for a decade)

Location: C+, B-

These numbers are based on the "sweet spot" in Metro Detroit. These are largely in the suburbs and some markets within the city. You can find higher ROI (on paper) here and probably in other cities…but the probability of actually collecting rent significantly decreases. Where these numbers are found, there is a very high rate of rent actually being paid.

We have over a dozen Fortune 500 companies just in Metro Detroit with huge Healthcare, Auto, and mortgage industry National footprints. Ford, Rocket mortgage, Beaumont hospitals and more. All complimented with Amazon fulfillment centers, google, and more tech manufacturing jobs.

The bad reputation of “Detroit” comes from OOS investors wanting sub $40,000, D class properties in poor condition, because they pencil out to 2-3% deals on paper. We don’t buy those.

We have found what works and repeat it as much as funds allow.

Detroit has one the highest rent to price ratios in the country…and we focus on the best balance of price/location within the area.

Here is a picture of my portfolio if you/anyone is curious.

[Sam McCormack]

Quote from @Mike Tikh:

Currently stuck in analysis paralysis on trying to find the right location for a first property, with a willingness to move anywhere in the US. 

Goal

My objective would be to go with a MFH, 2-4 units, higher would be better. I'd house hack and live in one of the units the first year, and use an FHA 3.5% loan. For amount, it would likely be in the $500-700k range.

My expectations are to have a negative cash flow while living there, and possibly a slight negative cash flow after moving out (until interest rates lower or rents increase). For example, a $650k 3-4 unit where each can rent out at $1,500, allowing for a negative cash flow of $2-2.5k/month the first year.

Possibilities

Given those goals, it would rule out the more expensive places (California, Seattle area, Austin). However, I have no idea how to choose from the remaining cities, it seems there are a lot of potential options:

- Midwest - Michigan (ie: Grand Rapids) seems to have options, also seeing Columbus Ohio and Indianapolis coming up

- Reno - I've seen mentioned several times on here

- Pittsburgh / Philadelphia / Twin Cities - All mentioned as lower cost to get started, and seem to be experiencing growth

I'd ideally like to find a place that has strong potential for future growth, a diversified economy, and I don't mind living in (being close to nature would be a plus). 

Any thoughts on how to choose - what metrics to evaluate, resources to read to help?

I think you are thinking of the best things. Areas with the best future/going in the right direction, strong economy, etc. Cincinnati is a good area which I have seen be mentioned, as well as just south of that I think will be good too (Northern Ky). it is very similar to Cincy. Would love to talk with you more about it! Shoot me a message if you have interest in the area!!

[Jimmy Lieu]

Quote from @Mike Tikh:

Currently stuck in analysis paralysis on trying to find the right location for a first property, with a willingness to move anywhere in the US. 

Goal

My objective would be to go with a MFH, 2-4 units, higher would be better. I'd house hack and live in one of the units the first year, and use an FHA 3.5% loan. For amount, it would likely be in the $500-700k range.

My expectations are to have a negative cash flow while living there, and possibly a slight negative cash flow after moving out (until interest rates lower or rents increase). For example, a $650k 3-4 unit where each can rent out at $1,500, allowing for a negative cash flow of $2-2.5k/month the first year.

Possibilities

Given those goals, it would rule out the more expensive places (California, Seattle area, Austin). However, I have no idea how to choose from the remaining cities, it seems there are a lot of potential options:

- Midwest - Michigan (ie: Grand Rapids) seems to have options, also seeing Columbus Ohio and Indianapolis coming up

- Reno - I've seen mentioned several times on here

- Pittsburgh / Philadelphia / Twin Cities - All mentioned as lower cost to get started, and seem to be experiencing growth

I'd ideally like to find a place that has strong potential for future growth, a diversified economy, and I don't mind living in (being close to nature would be a plus). 

Any thoughts on how to choose - what metrics to evaluate, resources to read to help?

Hi Mike, I recommend checking if the market has strong macroeconomics. I moved from Portland OR to Columbus OH to start with real estate investing and now own a successful portfolio. Columbus is absolutely crushing it right now and checks off all your boxes. You can still easily find 3-4 MF properties in the $500k-$700k range hitting the 1% rule with positive cash flow. Lots of growth in population and the job market so rental demand is strong. Not to mention lots of major companies moving and developing out here like Intel, Meta, Amazon, etc. Tons of outdoorsy stuff too (Metro Parks, Alum Creeks, Hocking Hills nearby)! Columbus has all the growth drivers and great cash flow and appreciation potential. Happy to connect and answer any questions you may have.

[Brian Teeter]

My recommendation is start by looking for a market that is well below the US median price of $405K. For example, here in Little Rock, Arkansas, the average is $245K.  Look for a market where a higher percentage of the population rents than national average. For example, 35% percent US population rents. But in Little Rock, 45% rents.  Then, within that market, study areas where it is actually less expensive to own than it is to rent.  For example, You might study an area and find that you can buy $125K home and average rents in the area for comparable homes are $1100-$1200.  I have had success making numbers work in Little Rock with over 700 rental properties over the last 25 years. Happy to help if you want to know more about investing in Little Rock. 

[Jake Andronico]

@Mike Tikh

Just speaking from my house hacking experience in Reno, NV, we're vastly different than the other markets mentioned. 

I've house hacked twice in Reno and it's changed my life. 

It's good that you've narrowed it down, and if you're really serious about it I'd recommend getting an Airbnb in each city for at least a week or two. 

That way you can get a feel for each area, the lifestyle, take a look around the neighborhoods, and get a feel for the place. 

House hacking is unique because you're living there too, so it makes sense to make sure it works for you and as an investment. 

For me personally, I chose Reno because I wanted to be close to Northern CA (where I have family), I love the outdoors and being close to Lake Tahoe, and all of the underlying tech and manufacturing jobs coming into the area, coupled with land constraints juicing appreciation here. 

We're definitely more expensive than the other markets mentioned, however. 

Whatever you decide, you're in an awesome spot, and I wish you the best of luck! 

[Austin Wolff]

Hi Mike, I'm the Market Intelligence Analyst here at BiggerPockets, and as someone who just moved across the country for my own house-hack, I feel qualified to answer this.  

First, I wrote an article regarding this specific question, take a look if you're curious:

The 10 Best Markets for Your First House Hack

Second, if you'd rather do your own research, we created a simple "Where to Start" dataset that includes data such as population, price, and rent growth. You can find that here: https://www.biggerpockets.com/resources/market-data/where-to...

Third, my biggest mistake was not talking to enough property managers to fully understand the rental market. For example, in Los Angeles (where I'm from), rentals are always in high demand. However, in Fayetteville, AR (where I moved), the "leasing season" is in the summer. Demand for rentals is near non-existent in this specific town during the winter, and demand is extremely hot in the summer months. Because most units are rented in the summer anyway, the "median rent" here is basically just a reflection of the rents you can get in the summer, not in the winter (big oops on my part). This is something that even I didn't pick up in my data analysis, and I'm supposed to be the "market analysis guy." Some things you just learn by picking up the phone and talking to boots-on-the-ground.

Long story short, there are many markets that could work (you've alluded to some in your post, and almost every market already mentioned in this thread is a solid pick). But because you're house-hacking, I'd also account for "quality of life" if I were you. Some things matter more than saving an extra $200/month because you chose to live in a market you didn't necessarily like.

[Alan Asriants]

If you're going to house hack, you need to ask yourself the following question:

Would I live here?

Whether you are considering moving or staying in your own area, you should really evaluate the neighborhoods and make sure that WHERE you are buying is a solid area. Don't chase cash flow - which it doesn't sound like you're doing.

Just becasue you read online that X, Y, and Z city is good to invest in, doesn't mean the fad is true. Being from Phila, I can tell you that this can be a great or horrible market to invest in - all depends on LOCATION!

So to summarize here are some tips for a newer investor looking to househack:

1. Know your market really well - who lives there, what kind of rent to expect, Would I live there?

2. Try to buy after 1950 and avoid single family conversions. The layouts are funky, often poorly done, and if they haven't been rehabbed in a long time then you need to likely fully gut the darn thing

3. Don't chase unit counts. Too many people want a triplex and quadplex that they let great duplexes pass them by. 3-4 unit properties are hard to come by and you could be waiting a while for a solid one (plus competition might be really high) 

4. Owner occupied properties tend to be better buys - well taken care of, and major cap ex usually done

Best of luck!

[James Hamling]

Quote from @Mike Tikh:

Currently stuck in analysis paralysis on trying to find the right location for a first property, with a willingness to move anywhere in the US. 

Goal

My objective would be to go with a MFH, 2-4 units, higher would be better. I'd house hack and live in one of the units the first year, and use an FHA 3.5% loan. For amount, it would likely be in the $500-700k range.

My expectations are to have a negative cash flow while living there, and possibly a slight negative cash flow after moving out (until interest rates lower or rents increase). For example, a $650k 3-4 unit where each can rent out at $1,500, allowing for a negative cash flow of $2-2.5k/month the first year.

Possibilities

Given those goals, it would rule out the more expensive places (California, Seattle area, Austin). However, I have no idea how to choose from the remaining cities, it seems there are a lot of potential options:

- Midwest - Michigan (ie: Grand Rapids) seems to have options, also seeing Columbus Ohio and Indianapolis coming up

- Reno - I've seen mentioned several times on here

- Pittsburgh / Philadelphia / Twin Cities - All mentioned as lower cost to get started, and seem to be experiencing growth

I'd ideally like to find a place that has strong potential for future growth, a diversified economy, and I don't mind living in (being close to nature would be a plus). 

Any thoughts on how to choose - what metrics to evaluate, resources to read to help?

 Lol, Twin Cities experiencing growth, that's the understatement of the century. 

Here is a few suggestions to help whittle down focus a bit more. 

Do you want to be in dense developed urban (such as Minneapolis), or surrounding urban (Bloomington, Richfield, Edina etc.) suburbs (Maple Grove / Plymouth) or semi-rural "path of progress" (Otsego, Monticello). 

And this should be a "living and working in ___ environment fit's good with my life" kind of things. 

Next, and you may be surprised, what hobbies and other interests are important?    Look, it matters being happy where you live, it does. So if your big into water sports, living in the desert could have all the profit in the world but it's going to be miserable hell and odd's are after some months the profits wont matter. And vice versa. So, it matters to also have a life style fit. 

Lastly; NUT-UP! At some point your just gonna have to jump, perfect is a process not a place. If you don't hold you accountable, if you don't push you, well, the worlds happy letting you be a bystander to life. 

[Donna Johnson]

Quote from @Evan Polaski:

@Mike Tikh, if you are going to live there, travel there and see which one you like.  

For a house hack, whether in a new market as you are noting or for people local, you need to find a place you want to live.  

I have not been to Reno, but climate is probably closer to what you have in Austin.  

The others will be cold, grey and wet from roughly November to March/April.  I know this isn't helping you narrow down your list, but only you can really do that. You can be successful buying small multis in any of these areas, you just need to learn them. 

What are the different neighborhoods like?  What are people in those neighborhoods looking for?  What is considered a good purchase price for that area?  

And then diving deeper, i.e. I love in Cincinnati, my pocket is very nice, but not a rental market.  The next neighborhood over (literally across the street) is pretty nice, but falls in a different township that has higher property tax, and then the next neighborhood (about a 4 min drive and 15 minute walk) is much lower end, and while fine class C-ish area, you can't push rents much, and the village has its own income tax, so you will pay 2% of your net to the village...

But back to first comment: take 4-5 days and travel to each.  When you pick one, rent an apartment for 6-12 months and figure out where you want to be.  Spend time around different neighborhoods.  You are going to be living there, so you might as well pick a place YOU want to live first.  Then live there before you start buying property.

I meant to post this to @Mike Tikh, but seems I mis-posted - sorry Evan

FYI Just a note about Reno- High altitude desert (4524'), https://www.bestplaces.net/climate/city/nevada/reno about an hour from Lake Tahoe & skiing https://logskirack.com/best-reno-nevada-ski-resorts/.  No state income tax  https://tax.nv.gov/about-nevada-department-of-taxation/incom...

[Donna Johnson]

One other consideration for Reno- college town.  The University of NV-Reno isn't going anywhere regardless of the economy. Of course a lot of gaming.  https://www.reno.gov/business/reno-s-economy 

[Marcus Auerbach]

YouTube is going to be your best research tool. Milwaukee has more duplxes than any other city in the US and most of the growth is happening in the 19 surrounding municipalities, all part of the 1.6 million metro area. We work with a lot of relocation clients and when I ask many of them say, they had no idea, but they visited a while ago and really liked it.. 450k is about the most you can spend on a duplex here. And we have a chronic housing shortage, so finding renters (or buyers) is n ever a problem. What we don't have is mountains and I miss those. On the other hand, we are 90 minutes from Chicago, which is nice if you have the big city itch on Saturday night. Also, I do fly a lot from Chicago OHare, especially international direct flights.

[Jonathan Greene]

I know you are looking for help by making this post, but what you've probably seen by now is that most answers are just from realtors saying how good their area is. That's not going to help you, even if it's true. You really want unbiased investor advice so I would focus more on the responses that are from investors (or anyone) living in one area in their bio, but telling you about another area that the invest in where they have no vested interest.

It's not to say that all agents are spamming, most is pretty reliable advice on their area, but it's still to be considered with a grain of salt.

You are giving everyone too wide a scope to help you - anywhere in the US, and then limited to the Midwest (huge), and others. Pittsburgh and Philly are completely different markets, not similar at all. Reno is not one I see a lot anywhere.

This is what I would do: make a list of every place you have ever lived and then make a second list of where all of your friends and family live that you trust. Then you take that list and see if there is crossover with some of the areas you are interested in and start there because you have a competitive advantage there (boots on the ground or knowledge).

One last thing, don't discount your own enjoyment. You can't move just for investment purposes because you can do both. You can find a place you will love living and also make money on your first investment. What are YOU looking for in a place to live?

[Drew Sygit]

@Mike Tikh

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

Similarly, if you put all Class D tenants in a Class A 4-plex, what do you think will happen?

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

The City of Detroit has 183 Neighborhoods we’ve analyzed.

PM us if you’d like to discuss this logical approach in greater detail!

[Patrick Drury]

@Mike Tikh
Keep in mind if you are buying an FHA 4-unit it needs to meet the sustainability test. I don't believe triplexes need to. A lender can probably chime in on that. The sustainability test is that 3/4 of units need to cover 75% of the mortgage from my understanding. The last thing you want to do is put a deal in a contract pay money for inspection and get an appraisal when you could have just ruled it out from the start with that. The sustainability test usually makes it hard to owner occupy 4 units in A locations in Columbus. If you can find smaller local banks in the market you pick they may have more unique products that they keep on their balance sheet or try and do the 5% down conventional on a 4-unit

[Greg W.]

Where do you want to live? Invest there. It's easier to invest where you live. Your assumption about appreciation is right on even though it may not cash flow now. Buy something that will be in demand for years to come and rent to tenants you want to rent to (college, young professionals, families, grandparents). Doing a quick search, I see a bunch of duplexes in and around Austin available in the price range you are talking about, if that's where you are from and want to live in the future.

[Mike Tikh]

Thanks for all the comments! Some great advice in there. The takeaways I'm getting are:

- Analyze the areas more in depth, looking at things like prices, rental ratio, housing availability, vacancy rates. Start with locations I'm most familiar with 

- Spend some time on Youtube learning about the different areas, and seeing which ones I'd be comfortable living in

- When narrowed down, rent an Airbnb and try to spend a week in each place

- From there, start talking to some property managers and networking in the area to find opportunities

I grew up around the metro Detroit area, so that would be a good starting point for the research, expanding out to nearby spots in the midwest like Ohio. I also lived in NV and TX for some time, and would prefer that climate, but need to make sure the financials make sense there. 

@Patrick Drury, I hadn't considered the different criteria for 4 units (and from what I can tell, it also applies to triplexes), so that's definitely something I'll have to consider. I'll also check out some of the guides listed here by @Austin Wolff@Austin Wolff

Appreciate everyone taking the time to help out!

[Bradley Buxton]

@Mike Tikh

Those all seem like fine places to invest. If you’re house hacking there is an aspect of your lifestyle to consider. Family, friends, activities, etc. You can get metrics and research any location and find real estate to invest in successfully. I like the philosophy of investing where you would want to live. That can be on a micro level like near parks or nightlife or macro level of better climate and terrain. Reno is a good spot because of the various industries, proximity to capital in CA, recreational activities, and low taxes. The Midwest has a lower cost of entry. Sometimes it helps to look at the places you wouldn’t invest and make a list of why. 

[Todd Dexheimer]

Don't aim so low. You don't want a negative cash flow property when you move out. That is a suicide mission. There are a ton of markets across the US that you can buy and cash flow. Pick a handful and travel to them. Make sure you like what's going on and figure out the submarkets that are the best for you. 

[Julia Lyrberg]

Hi Mike! It sounds like you have a solid plan with house hacking and using an FHA loan! When choosing a location, focus on markets with job growth, population increases, and a diverse economy. Sites like Census.gov or Zillow's market trends can give great insights. For your budget, Midwest cities like Columbus, Indianapolis, or Pittsburgh are solid options with affordable MFH properties and growth potential. Consider spending some time in these areas to get a feel for the market and see if you'd enjoy living there.

[Travis Timmons]

Find the most bada$$ property location that you can afford and move there. If it is a place where you, a person with options, really wants to live, then it is a good long term investment. 

I don't have a dog in the fight here, but pick the asset that you want to own the most 10 years from now. The 10 year return on expensive markets like CA, Seattle, Boston, etc. obliterate those of cheap midwest markets. Surviving the first few years is tough, but if you can figure out how to do that, you can have a 3-5% down payment (call it 15-25k) turn into 300-500k of appreciation over a 10-12 year period. That's the magic of real estate - leverage + appreciation. 

Since you asked for suggestions, I'll give a few. At a 500-700k budget, I'd look at a 2-4 unit property in places like East Nashville, Colorado Springs, Raleigh-Durham, Richmond, VA, maybe Salt Lake City (though that budget might not cut it there). Go somewhere that you get excited about living.

[Robert Ellis]

Quote from @Julia Lyrberg:

Hi Mike! It sounds like you have a solid plan with house hacking and using an FHA loan! When choosing a location, focus on markets with job growth, population increases, and a diverse economy. Sites like Census.gov or Zillow's market trends can give great insights. For your budget, Midwest cities like Columbus, Indianapolis, or Pittsburgh are solid options with affordable MFH properties and growth potential. Consider spending some time in these areas to get a feel for the market and see if you'd enjoy living there.

 you ever dealt with ground up non owner occupied construction loans? 

[Wale Lawal]

@Mike Tikh

To choose a property, consider personal preferences, lifestyle, climate, and community. Evaluate cities based on job growth, population growth, rent-to-price ratios, cap rates, and vacancy rates. Research stable rental markets, affordable entry prices, landlord-friendly laws, and infrastructure investment. Create a weighted criteria chart, visit top markets, engage with local experts, and use resources for market analysis. Prioritize cities aligning with goals while considering quality of life.

Good luck!

[John Fanous]

Quote from @Austin Wolff:

Hi Mike, I'm the Market Intelligence Analyst here at BiggerPockets, and as someone who just moved across the country for my own house-hack, I feel qualified to answer this.  

First, I wrote an article regarding this specific question, take a look if you're curious:

The 10 Best Markets for Your First House Hack

Second, if you'd rather do your own research, we created a simple "Where to Start" dataset that includes data such as population, price, and rent growth. You can find that here: https://www.biggerpockets.com/resources/market-data/where-to...

Third, my biggest mistake was not talking to enough property managers to fully understand the rental market. For example, in Los Angeles (where I'm from), rentals are always in high demand. However, in Fayetteville, AR (where I moved), the "leasing season" is in the summer. Demand for rentals is near non-existent in this specific town during the winter, and demand is extremely hot in the summer months. Because most units are rented in the summer anyway, the "median rent" here is basically just a reflection of the rents you can get in the summer, not in the winter (big oops on my part). This is something that even I didn't pick up in my data analysis, and I'm supposed to be the "market analysis guy." Some things you just learn by picking up the phone and talking to boots-on-the-ground.

Long story short, there are many markets that could work (you've alluded to some in your post, and almost every market already mentioned in this thread is a solid pick). But because you're house-hacking, I'd also account for "quality of life" if I were you. Some things matter more than saving an extra $200/month because you chose to live in a market you didn't necessarily like.

@Austin Wolff, how recent is the Where to Start data?