Best Strategy to Start Investing in an Expensive Market?

Question

Hey BP community,

I’m 23 years old and eager to start investing in real estate. I have access to a $500,000 HELOC but live in Fort Lauderdale, where property prices are high, and cash flow opportunities seem tough to find.

I’m considering different strategies like:

BRRRR or flips (but concerned about high acquisition costs)

Out-of-state investing (but hesitant about managing from afar)

House hacking (but not sure if it makes sense given my situation)

For those who’ve started in high-cost markets, what strategies worked for you? Would love to hear insights on deal sourcing, financing, and whether staying local or looking out-of-state is the better move.

Thanks in advance!

Nathan Gesner · Answer

I think you should consider a house hack. You are young and presumably single, so living in a master suite while renting out some other rooms is easy. It gives you one property that can potentially pay for itself while putting a roof over your head and giving you experience as a hands-on landlord. It won't take much money to purchase something that makes sense.

Use the remaining money to invest long-distance. There's plenty of information on how to find a good market with a quality property manager. You could buy 5+ cash-flowing houses and let a professional PM handle the load. You have to pay fees, but you'll have a professional handling issues instead of bleeding money trying to figure it out for yourself, then you have your time free to pursue other things.

Nicholas L. · Answer

@Daniel Vargas

definitely house hack.

also - I know everyone has HELOC money these days and pretends it's cash, but it's not.  and it's not only not cash, it's expensive money - for it to be worth using you'd need either (1) something short term, like a flip (not recommending that here) or (2) a very high return that beats the interest rate you're paying on it.

James Wise · Answer

How'd you get $500k at 23? Do whatever that is some more.

Jorge Vazquez · Answer

Hi Daniel,

At 23 with a $500K HELOC, you’re in a great spot to get started! Fort Lauderdale is a tough market for cash flow, so you’ve got to be strategic. House hacking could work if you find the right deal, but I’d also look into BRRRR or flips in secondary Florida markets like Tampa or Jacksonville, where acquisition costs are lower. Out-of-state investing is another solid move if you have a strong property manager. The key is velocity—keep your money moving and growing. Happy to chat more if you need insight!

— Jorge

Charbel El khouri · Answer

Hey Daniel,

With that $500K HELOC, you’re in a great position to leverage it for a multifamily property, especially if you can find a deal where the rental income covers your debt payments and builds equity over time. Even in high-cost markets, creative financing or partnering with experienced investors could help you get in the game. If you ever need guidance, feel free to reach out!

Best of luck!

Wale Lawal · Answer

@Daniel Vargas

At 23 with a $500K HELOC, you're in a strong position, but Fort Lauderdale is tough for cash flow due to high prices. If cash flow is your priority, out-of-state investing in landlord-friendly, high-yield markets (Texas, Tennessee, Indiana, Georgia) is your best bet—use the HELOC for down payments and rehabs. If you prefer to stay local and build equity, house hacking a duplex or triplex in Fort Lauderdale could work, especially if you can add an STR component to boost income. Flipping or BRRRR in a secondary Florida market (Tampa, Jacksonville, Orlando) can also be a solid play if you find deep discounts. DM me, and I’ll point you in the right direction!

Good luck!

Jared Smith · Answer

@Daniel Vargas I work with out-of-state investors all day, everyday and present them deals all-day, everyday. You will really need to look hard in order to find deals that make sense and you really need to take you cost of capital into account when doing your analysis. Access to a heloc definitely makes more sense if you are doing a BRRRR strategy or flips, but neither are a sure thing. You have an exciting opportunity at your fingertips, some cash purchases could make sense in higher appreciation markets if you were looking for other options or to diversify. I am interested to hear what the other pros have to say about your situation and how they would recommend approaches this.

Best of luck!

Madri Koppe · Answer

I think house hacking is always a good option, especially if you are young and starting out. It gets you entry into real estate investing and can be a viable path in an expensive market. It likely won’t be about cash flow but can offset your expenses to save more money to invest again out of state if you’re looking for more affordable options. Plus you’ll have experience and can better assess what you want to do next.

Drago Stanimirovic · Answer

Daniel,

You're in a great spot with a $500K HELOC, but Fort Lauderdale’s high prices make cash flow tough. House hacking could be a solid option, allowing you to offset living costs while building equity. A small multifamily or even renting out rooms in a single-family home could work, especially with short-term rentals. Flipping or BRRRR is possible, but you need to be sure your margins are strong. If cash flow is your priority, out-of-state investing in more affordable markets like the Midwest or Southeast might make sense, though managing from a distance requires a solid local team.

If you stay local, networking will be key since the best deals in expensive markets rarely come from the MLS. Building relationships with wholesalers, agents, and investors who specialize in off-market properties will give you an edge. Also, consider financing strategies that allow you to maximize leverage instead of tying up all your HELOC funds in one deal.

If you want to run numbers on different financing options, let me know. Happy to help!

Drago

Mya Toohey · Answer

I am in the Clearwater beach Florida area! I would be happy to help you if you are interested in the beach areas?!

Best Strategy to Start Investing in an Expensive Market?

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