First Time Purchase - In or Out of State?

[Jamal Atwell]

Hey BP,

I currently live in Washington D.C. and i'm 23. I can't quite afford these $500,000 houses for a 2 or 3 bedroom so I've got to look at alternatives. My lease expires in April so I'd rather make moves before then.

Should I, invest in the cheaper areas in Maryland like Prince George's County or Montgomery county. I can afford a nice looking 2 or 3 bedroom home for $300,000 with 5% down. The catch is that those areas are significantly less nice than Arlington, Alexandria, West DC. Higher crime, and I'm not sure if they will appreciate as nicely. Also, after doing the math it seems properties in DC are AWFUL at cash flow. I haven't found a single property that cash flows at least $100 after I would move out. I may be able to sneak by if I find a really good foreclosure.

Or, buy an out of state property in somewhere like Oklahoma city with 20% down but for $100,000. I can't reasonably expect at least $200 cash flow investing there. However this will deplete all of my capital and I will have to continue to rent.

Any advice from anyone would be appreciated! Should I look for appreciation in the DC market or cash flow elsewhere?