Oakland: First time buyer, SFH-live, hold, appreciate, rent out?

[Ambuj Punn]

Hello BP!

First and foremost, hope everyone is staying safe during these strange times.

I've been a long time lurker and a listener to the podcast and finally decided to create an account and become more active on this vibrant community. After renting for a little bit, my brother and I have decided to team up and pursue real estate investment in the bay area. We're in the tech industry and have saved up a bit of money and were hoping to purchase our first property.

We were thinking to purchase a SFH or a MFH as a primary residence with a primary residence mortgage, live there for a year, build equity and let it appreciate, and then after a year rent it out and move to another property to continue the house hacking.

We've been able to find decently priced SFH in Oakland that are ready to move into in which we could call home and hold onto for a year before renting it out (generally in nicer areas of Oakland). At the same time we've found MFH in a bit not as nice areas of Oakland (less maintained houses, not as new renovations, etc) but the prices have been incredible compared to the more desirable areas. Since we'll be living there for a year, we'd like to live in a decent neighborhood with a bit of focus on lifestyle rather than immediate house hacking to begin with. Initially, we won't be making any cash flow for the first year which we're okay with but after that we plan to rent it out to start the cash flow process (we're doing our due diligence by doing the calculations and using rentometer to make sure our rental income would offset our mortgage).

With our lifelong goal of FI, what would you recommend we do? Does our plan of buying a property in a more desirable neighborhood (whether its SFH or MFH) as a primary residence, living in it for a year, letting it appreciate, and then renting it out and continuing the process sound like a good idea for beginners in this market?

Looking forward to your replies!