Invest In My Costly & Appreciating Market or Go Elsewhere?

[Jason Bohling]

I live in a (now) expensive market which is seeing significant appreciation and this in turn is making it increasingly harder to find cash flow. My goal is to be financially free, i.e. able to live solely off the cash flow from my properties within 8 years. While I don’t have debt other than the mortgage on my current primary residence, I don’t bring in a ton of money, either, so throwing down $100k down payments are out, at the moment! Due to current family situation, moving and house hacking isn’t possible, so that’s out.

For those much more experienced and wiser than I am, do you think it would be better to still focus on my local market (considering I know the area and local economy, can do some of the work myself to save cash on a rehab and can utilize local and existing relationships) and find a way to create cash-flowing deals to achieve my goal, or look for a cheaper market with a lower cost-barrier to entry where cash flow is already more prevalent? If you believe staying in my local market is the way to go, why, and if I should focus elsewhere, why do you suggest that as well?

Thanks in advance for anyone and everyone willing to share some knowledge, wisdom and advice with me, it’s much appreciated!

[Alecia Loveless]

@Jason Bohling My area has seen great appreciation and huge rent increases. However, the overall CoC and cash flow have not quite kept up as well as they might have because of this.

I’m still choosing to invest in my area because of my proximity to larger metropolitan areas and a high quality of life. I’m particular about which properties I will purchase in that I make sure they are upscale by my standards (I would live in them), and I believe their rents will continue to be solid and enough to cover my bills even if there is a market downturn.

I think you can find good investments that will work towards your goal of retirement in a few years time because this is the same goal I myself am also working toward.

I have a fairly low earning hourly wage W-2 job but it does support mortgages that have units with leases in place which my bank counts towards my income.

I’ve added 7 doors this year already and have an offer in currently on a 2 unit that if I purchase, I will ultimately turn into a 3 unit because it will cash flow $600 more a month in exchange for about $10,000 worth of work.

So it’s up to you if you stay in your market and buy more expensive units or move out of state and buy less expensive. It can be done either way.