Best markets to live and invest?

[Josh Deeden]

My wife and I have finally made the decision to leave Southern California and seek greener pastures.  We are in our early 40s and don't have a retirement plan or much saved, and we've come to the realization that the status quo is unsustainable and that we need to start making better financial decisions to set ourselves up for the future.   We currently rent in an affluent neighborhood and pay through the nose for the privilege.   Additionally, I have a pretty decent tech job and what I pay in taxes every month is enough to float a mortgage on a decent house in most other markets.   And it kills me a little inside to know that.   But as much as we love California and all of its amenities, living here isn't in alignment with our financial goals and it's time for us to leave.

And now we're confronting the decision on where to move, and where in the country would best serve our financial goals of reducing our personal living expenses and present the most opportunity for acquiring and operating income property.    We also want to find some place we enjoy living, or at the very least, tolerate for 5 years as we build our portfolio.  I personally would love to live in Texas... San Antonio is the most likely candidate, but I know that Texas is a hot market and I am left wondering if maybe I'm just too late to the party there.   The property tax situation there seems like it could be a significant risk to cashflow, especially given the appreciation we've been seeing there.    And I wonder if we'd even be able to compete as part-time/beginner investors there.   So what do you guys think?  Does Texas still make sense for small/part-time investors?   Or should I be looking elsewhere?

Or, let me re-frame the question just a bit.   If we wanted to optimize our lives for a low cost of living/tax burden the most opportunity for building our real estate portfolio in a beginner-friendly market, where should we be looking?  We're pretty much open to any/all possibilities.   What do you think?

Appreciate all of your input!

[Jim Cummings]

@Josh Deeden. 
You didn't indicate your tech background, but the first objective, IMO is to establish yourselves in paying occupations in your new location. Once you are established in your new location and are meeting your basic needs with some left over, then you can begin to think about investing for the future. 

As for locations, I would suggest Austin which has a number of High-Tech Companies and is continuing to attract high tech businesses from CALI. You can live in some of the outlying communities more economically than in the Austin inner-core, and the schools are better - if that's a concern for children. Some suggestions, Round Rock, Pflugerville, Georgetown, Cedar Park & Leander on the North side of Austin. On the south side, Buda, Kyle, San Marcos, & Bastrop are all possibilities. 

San Antonio would also be an excellent choice as there is a burgeoning High Tech Community. Generally speaking,  Cost Of living is thought to be less in San Antonio than Austin.  As with Austin look for outlying communities where you can have a lower cost of living, but still have access to all the amenities and facilities of the major metro area. As for specific communities, Helotes, New Braunfels, Boerne, Schertz, Universal City, and Converse are potential destinations. 

Once you're meeting your basic needs and beginning to stockpile some savings, the best way to satisfy your housing needs and also begin to invest is to purchase a Duplex or other Multi-Family (MFR) property. You live in one unit and rent the others. This would enable you to get into the property using an FHA Loan (3.50% Down Payment) with a total out of pocket of about 7.50% Of the Sales Price. If you buy a duplex, ideally a large percentage of your Mortgage is paid by renting out the other unit. Or if you bought a Triplex / 4-Plex, all of your Mortgage Payment would be covered by rental income from the other units, allowing you to stockpile additional Cash for future investments.

Check out "7 Years to Seven Figure Wealth" by Brandon Turner. It's a ambitious roadmap, but doable with relentless drive and perseverance

It's NOT too late to start. But you do have to begin. 

Good Luck.

Let me know if I can answer any questions for you.