Should my savings go towards a house hack or an out of state investment?

[Johnathon Asman]

Hi All,

I have been a 401K investor for my entire working career, but I've recently been considering dipping my feet into the world of real estate and my boss recommended to check out this website. 

Before I start re-allocating my resources, I was curious on what all of you might do in my situation. I have an opportunity to purchase a home from a family member for $800k which has the potential to be sectioned off into two ADUs with a combined value of $2-3k/month. I currently have $24k available for a down payment, so because of the current interest rates my mortgage payments would be taxing on me even after considering the additional revenue. Plus, I still need to factor in all the costs associated with renovations and running a business - I also have the concern of renter's rights in California. 

Do you all think it might be a better idea to invest in more affordable rental properties out of state, and save those earnings towards my own personal home? 

Some additional things on my mind to consider:

- I am in a serious relationship and am considering starting a family in the next few years.

- I am not willing to move out of California - at least not anytime soon.

- The property is in Long Beach, CA right next to a community college and a ten-minute drive from a major university.

I'm very new to all of this and don't know the questions that I should be asking - so if you want to ask me some additional questions that would be okay!

Thank you in advance,

John.

[Nicholas L.]

@Johnathon Asman

given what you said about your situation, the only thing i would rule out (at least for now) is investing out of state.  those types properties will be INvestments over the first few years, or even longer - meaning they'll take capital, and you won't net or earn anything.  so, given everything else you said - it would not make sense to do that before your own primary situation is further along.

hope that helps