House Hack vs Out of state investment for First Home Investor.

[Anton Filiptsov]

I want to purchase Multi Family property.

Initially i started to look for House hack.
Giving the prices in MA overall, there is no way how house hack can be profitable, i tried to calculate 1% rule, and none of the properties were able to make it.
Cheapest multi family and single family, in average areas is 500-590k$

I am pre approved for 600k loan.
My ideal loan is around 300-500k.
I can put approximately 20-40k down.

And now i am at the point where i can have 2 option:
1 - House hack -  Look for Providence RI properties. (I haven't found any good options in NH for house hack).
I can use FHA loan and instead of 20% down, i can put 3-5% down, and it will increase my byuing power to 300-500k.

2 - Buy out of state property, for example in OH or MI, which will cost 100-140k and loose House hack ability.
And continue paying my rent in Waltham.
Because i can not use FHA out of state, i need to put 20% down, so my goal it so be within 160k range. 


Do you have any suggestions or tips what i should do in this scenario?
Out of state looks way better on numbers, but i wont move there, and i will still need to pay my rent, that makes everything worse.

As well as prices for housing around me ( I Live in Waltham MA) are nonsense. House 25min away from Boston cant cost 800k.

And based on my search its either Providence or Worcester / Springfield. But i think Providence is way better.

[Rob Gifford]

Hi Anton! I'm a small time investor based in the Boston area, but investing out of state. I would have loved to house hack if I knew about it when I was younger. At this point in my life, I've chosen to invest out of state- Albany, NY, which is a low appreciation market with great cashflow. If I were in your shoes, though, I'd house hack, at least for a couple years. You'll be able to get a much higher ROI since your'e putting less down and you'll likely be able buy in a better, higher growth area. Providence and Worcester are your best bets as I'm sure you're already thinking of. Another key financial benefits of house hacking are a lower interest rate (investors pay extra points) and the fact you likely won't have to pay taxes on appreciate or profit when you sell the property if you live in it for a certain amount of years.