Relocating from Los Angles to Puchase/Invest

[Bart Esparza]

Wife (28) and I (33) are 5 months pregnant with first and have been planning to move out of LA for past few years. Recently sold our home and living with Parents rent-free as we plan our big move.

I am currently pre approved for a 600K mortgage with 20% down to purchase a “second home”, current primary residence being my parents as I am on the title. Have 175K liquid with 750+ credit.

My dilemma is there are so many potential markets to relocate and purchase a home and and invest. We have traveled a bit and like many places but our favorite has been Nashville, TN for overall cost of living/weather/Culture.

Our plan is to purchase a house in the <450K range and relocate later in fall after our Baby is at least 3 months. Would it be a dumb idea to buy sooner and rent house for a 6 month lease while we plan our move? We are medical professionals so finding employment is not too difficult however still not sure if better to wait even with no current rent or mortgage. After moving I would like to explore purchasing a rental cabin/house in Gatlinburg region for a short term rental vs purchasing investment property in another state/cheaper market.

Any suggestions or advice is appreciated! A few months ago I read a few of the BiggerPocket books, listened to many podcasts, and even started to obsess about buying a mobile home park but now with the pregnancy I fell back into “safe zone” mentality of buying a primary residence and making smaller moves.

Thanks for reading long post!

-Ruben

[Julie McCoy]

Hey @Bart Esparza (you go by Ruben?) good to meet you!  I left Los Angeles recently myself after 10 great years there, and also settled on Nashville as my next home.  I'd lived there before and loved it, but one of the things that made me choose Nashville was that it has so many of the good things Los Angeles has to offer in terms of entertainment and good food, etc. but on a much smaller scale!  (the traffic can suck in Nashville too, but again on such a smaller scale that it's not too bad to fight through, at least relatively speaking)  You'll have lots of options in your price point.  

As for buying now and renting until you move, given your timeline of ~6 months you might be happier just waiting.  It's too short a timespan for a long-term lease on your home, the regulations in Nashville are too strict for you to do a short-term rental; you could do something like a corporate rental/rent to traveling nurses but then you'd need to furnish the house too.  It's just six months, and the market in Nashville is cooling off a touch at the moment, so I think you'll be better off just waiting until you're ready to move.  Right now you might do an exploratory trip to try and figure out which areas you'd like to focus on - there's a lot of great possibilities for a young family so having a focus will help your search go that much faster when the time comes!

I also own STRs in Gatlinburg/Pigeon Forge, I began purchasing when I was still living in LA, and they are fantastic investments! While it was no trouble to manage them from afar, I do enjoy having closer proximity to them now that I'm in Tennessee. (in fact, despite living in Nashville I spend most of my time in East TN now, as it's the primary real estate market I serve, specifically working with long-distance investors on finding great STR cabins) @Matt Castle is right that the market is super hot, but they're still cash flowing machines, which is why it's staying hot. When you're ready to buy you can assess if it's still where you want to go, but I expect it to stay strong for awhile yet.  

Congratulations on all these upcoming changes!  Los Angeles was good to me for a long time, but I'm definitely enjoying a slower pace to life now, and I'm sure you'll feel the same.  :)