Out of State or Local Wait?

[Kyle Horjus]

First of all, wasn't that catchy? Ok so here's my situation and I'm hoping to get a myriad of opinions knowing full well there might not be one right answer.

I'm 26, single

I live in Los Angeles

Make 55k a year before tax

I have around 20k in invest-able cash   (recently taken out of stock market, please don't crucify me!)

Saving $400 a month

I do not own any real estate

I would love to stop renting, but leaving LA is not an option and real estate prices are obscene here. Even house hacking would not satisfy the 1% rule. I want to invest out-of-state, but would doing so make me ineligible for first-time-home-buyer incentives? These are only available to owner occupied purchases in LA and I don't want to lose this huge advantage if I choose to buy in LA in the future (once/if the market crashes).

If I do not lose those incentives, I would lean towards buying out-of-state and getting a reputable management company to manage the property on my behalf. I would be curious to see if anyone would recommend just biting the bullet in LA and getting an FHA loan + FTHB incentives despite the red hot RE market. If so I would like to get a 2/2 apartment and rent out the other room or Airbnb the thing (maybe both!). Question is...will the amount I'm saving on rent (once I own my apt) be enough to compensate me for the reduced RE prices from an impending RE crash in LA? Should I just bunker down and wait till a crash before making my first move? This is my dilemma that is currently preventing me from action.

All opinions are welcome! Thanks in advance!

[Steve Kontos]

@Kyle Horjus @Account Closed

I can definitely relate to you guys.  As someone who is born and raised in New York, prices are just ridiculous here.  As a result, I built my business around out of state investing.  Truth be told, I haven't looked back.  As you know, your money goes a lot further out of state.  Once you have a system in place and a good team on the ground, you can repeat the process and grow.  My recommendation to you is if it's something your seriously considering, speak to someone who has done out of state investing successfully.  Learn and shadow that person so when your time comes, you are properly equipped because this type of investing requires proper attention to several different components.

Best of luck and if there is a specific question you have, feel free to PM me.