Advise me on my 1st investment! Lots of cash, what to do with it?

[Account Closed]

Hi all! I've been educating myself through audiobooks, podcasts, the forums, and webinars and I think I'm finally ready to get started! Just not quite sure where to begin..

About me:

• 794 credit score
• $150k liquid assets (in a mixture of ETFs, savings accounts, etc)
• I work as an engineer. My salary and frugal lifestyle allow me to save $3k a month, which I currently just dump into ETFs
• Currently live in Denver, CO (have previously lived in Chicago and Central IL, Houston TX, Cleveland OH, Iowa City & Cedar Rapids, IA)
• Looking to free-up probably ~$50k for now to invest in real estate

Goals:

• long term growth through using leverage to buy and hold rental properties
• early retirement when it conservatively makes sense (at 30 would be great :) - I'm 25 now)

Here's where you come in! I'm debating between a few different strategies to start out and would love input from knowledgeable BP-ers!

• Attempt to house-hack in Denver area (concerns me a little because the market is *hot* and hard to tell if it will keep rising at this rate. Also, high initial investment cost that may exceed the $50k I'm comfortable investing for now)
• Look out-of-state at one of the locations I'm familiar with. Houston stands out as a growing market, relatively low price-to-rent ratios and continued immigration of businesses and residents. Cleveland has lower entry point but it's been longer since I've lived there and seems to be less of a growing market
• Look out-of-state at various other markets that stand out for their combo of growth potential and low price-to-rent (e.g. Charlotte area)

Any and all help is much appreciated!

[Quoc Tran]

@Karen Lipa House hacking is a great way to get started if you believe it's something for you. My first property was a SFR in Lakewood where I house hacked the spare rooms. This turned out pretty well: lived for free in a nice big house with mortgage and utilities paid every month, learned how to be a landlord, and gave me time to research about RE more. While searching for a property I had the same doubts as you... "The market is way too hot and prices can drop any day now..." This was two years ago, and we're still climbing. Denver is actually near the average affordability over the last 40 years. The market just seems outrageously high priced because people are comparing with prices from 2012, which was the lowest point in those 40 years. (Source: Denver Commerical Real Estate Podcast) However, this fear did not stop me and I bought the house anyway with intention to rent out the rooms and cash flow. But here's the kicker. I had no idea BiggerPockets existed before buying the property so I had no idea how to identify a "good" deal. The house just "felt" like a good deal... and turned out it was. The fact that you've already been researching puts you ahead of the game. You will have solid numbers to back up your "feeling like it's a good deal". You're in a better position :) I think the most important part is to start somewhere vs. never starting at all. Prioritize good cash flow. Even if prices drop, you won't lose money until you sell.