Live in LA, should I continue to rent and invest elsewhere?

[Nicholas Roertgen]

Hi All,

This is my first post as I am new to bigger pockets and real estate investing.  I am very motivated to buy my first property and eventually start generating some cash flow.  I currently live and work in Los Angeles and plan on staying here for the foreseeable future.  I like my job and don't plan on quitting for at least another 5-7 years in which I hope to have enough passive income from rental properties that I can walk away if I chose to.  After that, I will decide if I want to stay in LA or move somewhere cheaper.  For now, moving from LA is not an option.

I know in LA it is very hard to generate positive cash flow, and it's mostly an appreciation play. I want to get into real estate investing more for the passive income/cash flow and not just for appreciation. I am currently renting an apartment in LA with my brother and we believe we are throwing money out the window by not using that money to pay down a mortgage instead. I wanted my first real estate investment to be a SFR or duplex I can live in and possibly house hack, or at the very least, just find a house to live in and start paying down a mortgage and gain equity instead of just renting. I live with my brother and we are almost at the point where we can afford a downpayment for a 2 bdr house in LA, but we would have to spend even more time saving (while still paying rent) in order to have enough money to be able to afford a bigger house or duplex we could house hack.

My question is this, is it smarter to buy a house in LA and start putting the rent I am paying toward a mortgage even if I don't house hack it, or should I keep renting in LA and put the down payment on a house in another state that would allow me to generate much better cash flow?  I have another brother who lives in an area that has a solid rental property market.  He said he would help manage so I wouldn't have to worry about managing from afar.  With that being said, with my downpayment would you...

Buy a house in LA and start paying down the mortgage to gain equity while also saving to invest again later?

Keep renting and saving now for another year or two and make enough money to buy a big enough house/Duplex/House w/ADU in LA I could house hack (but will probably still have a mortgage payment because it is LA)?

Keep paying rent in LA and invest in better market out of state?

Thanks for taking the time to read this.  Any and all advice is welcome and appreciated.  Also feel free to call me an idiot, just let me know why so I can learn from it.  

Thanks all.