First home purchase, should I buy nearby or out of state?

[Shane Dunne]

Hey guys I live in Santa Barbara and am hoping to make my first real estate purchase within the next 8 months or so. However living in SB is beautiful it is also ridiculously expensive. I have recently been fortunate enough to find somewhere in the area to rent (8 months out of the year) for $375/month utilities included which is going to save me about $1,000/month from my previous rent. I currently have about $30k saved including my bank/stocks/Roth IRA and everything. With the reduced rent should be able to save up about $2-3,000/month. Here is my main debate:

1. Should I start by investing in out of state? If so, any recommendations?

or

2. Try to find something 1-2hrs away that I could afford?

I know there are certain perks to living in your first home purchase but not sure if it would be worth it considering the prices around here. 

Looking forward to any and all feedback.

Thank you,

Shane

[Lee Ripma]

@Shane Dunne

You’ve got such an incredible deal on rent that I would keep that regardless of what you do. If you’re not planning to live in your real estate that frees you up to purely invest in real estate. Figure out the returns you want and the goals you have and then start investing.

My guess is those first investments will be outside of SB just due to high price of entry in the SB market.