Baltimore Buy and Hold Strategy

[Thomas Abbott]

Hey BP,

I've got a new investor strategy question relating to buy and hold properties in Baltimore.

It's looking like I'll be moving to Baltimore for work within the next couple months. In seeking out housing options I decided that I would like to live in the Federal Hill area (which tends to be one of the higher priced neighborhoods). In looking at the numbers, I can buy a 3BR SFR for roughly $275,000, live in one of the rooms and rent out the other two for a total income of about $1800/month (before expenses). All in all it seemed like a great way to start in real estate investing until I began reading about some of the deals investors are getting in other areas of Baltimore.

I have seen and read posts where Baltimore investors have acquired properties for $40,000 to $80,000 and then rent them out for about $1000/ month (rough numbers).

In your opinion, would it be a smarter financial decision to use my saved money to either:

1. Buy in Federal Hill to "househack" while learning buy and hold first hand?

or

2. Rent in Federal Hill and use my saved money to invest in lower priced properties with a way higher cap rate?

Thanks in advance for the advice!