My Life-Changing Decision

[Andy Okamoto]

Hey all!

I'm Andy, a recent University of Utah Computer Science graduate and now a full-time, 100% remote software engineer. I bought my first house-hack SFH property in Sandy, Utah in 2022 where I currently reside.

I am now 22, single and have enough saved for another down payment (targeting small multi-family). The combination of interest rates + high prices is making me consider moving to a more affordable market. Although my income is great for my first job out of college, I've talked to a couple lenders in Salt Lake City and got the feeling my salary (~85k) will not be enough without bringing a larger (~20%) downpayment. This larger downpayment would require me to liquidate stocks which I am not too keen of doing at the moment.

As an active listener of the BiggerPockets podcast, I'm well aware that midwest markets like Indianapolis, Cleveland, etc. are the "top" markets these days in terms of current growth + affordability. I am very interested in potentially moving/buying in these markets next to universities or areas with high job growth potential.

I am looking for advice/direction on what you would do in my position. My current 10 year goal is to get to 10k a month in cash flow. I greatly appreciate all responses and will take each into careful consideration.

Best,

Andy Okamoto

[Max Ferguson]

Sounds like regardless of what you do, you'll crush it. Definitely on the right path! 

You seem like an Ideal candidate to pick a househacking market anywhere in the U.S. This may be the best time to secure a property, live in it (and less than 20% as a primary), then move or reassess the plan in a year after your mortgage implication is up. I don't know the statistics behind Salt Lake, but I don't believe it is slowing down anytime soon. May be a good time to get a fixer-upper in a nice neighborhood and fill with roommates, or a 2-4 unit and do the same thing there. 

Let us know what you figure out! 

[Samuel Diouf]

Hey Andy, it's great that your continuing to grow your portfolio with house-hacking! It's such a great strategy to start with.

If you're looking in the mid-west, personally, I love house hacking in Columbus, OH. The city is growing every day and is a fun place to live. Because the city's population has been growing so fast and so many businesses have been moving in.. the appreciation has been huge here, and it should continue to be for a while. 

When house -hacking with 5% down, returns on cash invested could be huge when you factor in the appreciation gains. You can double your money in one year if your property appreciates only 5%.

[Anthony L Amos Jr]

Quote from @Andy Okamoto:

Hey all!

I'm Andy, a recent University of Utah Computer Science graduate and now a full-time, 100% remote software engineer. I bought my first house-hack SFH property in Sandy, Utah in 2022 where I currently reside.

I am now 22, single and have enough saved for another down payment (targeting small multi-family). The combination of interest rates + high prices is making me consider moving to a more affordable market. Although my income is great for my first job out of college, I've talked to a couple lenders in Salt Lake City and got the feeling my salary (~85k) will not be enough without bringing a larger (~20%) downpayment. This larger downpayment would require me to liquidate stocks which I am not too keen of doing at the moment.

As an active listener of the BiggerPockets podcast, I'm well aware that midwest markets like Indianapolis, Cleveland, etc. are the "top" markets these days in terms of current growth + affordability. I am very interested in potentially moving/buying in these markets next to universities or areas with high job growth potential.

I am looking for advice/direction on what you would do in my position. My current 10 year goal is to get to 10k a month in cash flow. I greatly appreciate all responses and will take each into careful consideration.

Best,

Andy Okamoto

Congrats on your recent graduation! 

Ohio offers multiple markets that are affordable and offer good cashflow. You could house hack a few Cleveland multifamily properties, then make your way to Columbus, which is one of the top real estate markets in the country. 

[Min Zhang]

I personally love the Cleveland market for its strong cash flow potential. I recommend checking properties on the west side of Cleveland, as they offer excellent investment opportunities with solid rental yields and growth potential. Let me know how I can help Andy!

[Regina Blake]

Hi, I definitely would recommend Ohio check it out for yourself. Congratulations on your achievements keep up the hard work and reach out if you have any questions. Best WIshes! 

[Travis Timmons]

Focus on maximizing your W2 income over a real estate market. If you want to reach financial independence, a good income + limited expenses will be the catalyst. Move to the place that can offer the highest income without a punitive cost of living. Or if you move to an expensive market, get 5 roommates and/or do everything you can to keep your expenses low. 

As for a real estate market, all of those markets are pretty much the same. Develop a subject matter expertise and a strategy.

Remember that the rent growth in lower appreciation/high cash flow markets will be lower than a place like SLC. I'll use my anecdotal example - I moved from St. Louis to Houston in 2009. The apartment that I rented in St Louis went from $595/month to $850/month in 15 years. The apartment that I rented in Houston went from $770 to $1800/month. Property values followed a similar trajectory. Regardless of where you live, buy the property that you want to own the most 10 years from now (within your budget - none of us have unlimited funds). 

[Gino Barbaro]

@Andy Okamoto

Great options for you! If you can work remote, I would choose a market where you would like to live and where you can invest in deals that cash flow. If you're looking for cash flow markets, there are plenty in the mid west.

I would buy a duplex or tri flex, and house hack. If it was me, and knowing what I now know, I would find a market where I can invest in, be boots on the ground, and learn the business. Once I run out of money, I can partner with others with capital and I can manage the deals for a piece of equity and fees. But, it starts with choosing a market where you can afford to buy.

Congrats on your home!! Huge accomplishment

[Jimmy Lieu]

Quote from @Andy Okamoto:

Hey all!

I'm Andy, a recent University of Utah Computer Science graduate and now a full-time, 100% remote software engineer. I bought my first house-hack SFH property in Sandy, Utah in 2022 where I currently reside.

I am now 22, single and have enough saved for another down payment (targeting small multi-family). The combination of interest rates + high prices is making me consider moving to a more affordable market. Although my income is great for my first job out of college, I've talked to a couple lenders in Salt Lake City and got the feeling my salary (~85k) will not be enough without bringing a larger (~20%) downpayment. This larger downpayment would require me to liquidate stocks which I am not too keen of doing at the moment.

As an active listener of the BiggerPockets podcast, I'm well aware that midwest markets like Indianapolis, Cleveland, etc. are the "top" markets these days in terms of current growth + affordability. I am very interested in potentially moving/buying in these markets next to universities or areas with high job growth potential.

I am looking for advice/direction on what you would do in my position. My current 10 year goal is to get to 10k a month in cash flow. I greatly appreciate all responses and will take each into careful consideration.

Best,

Andy Okamoto

Hi Andy! I'm an investor myself and moved from Portland OR to Columbus OH to start house hacking. I moved on to purchase rentals that are clean BRRRRs and built a rental portfolio of over 7 figures. You may want to check the Columbus OH market - overall great macroeconomics. We see so much population and job growth here especially now that major companies like Intel, Meta, Google, Amazon, etc. are moving and developing here. Happy to connect and answer any questions you may have.

[JooYung Choi]

Hey Andy, love the hustle! 22 and you are already making moves! 

I am assuming that you will not be selling your current home. What are market rents for your current house hack if you were to rent it out whole? Will 75% of it cover the PITI?

You should do a DTI calculation so you know exactly how much you can allot to your housing payment. Then it's the purchase price of your next home (and the associated PITI) that will determine what % down you can pay.

Love to chat more about real estate.. let's connect!

[J Leman]

If you are going for JUST cash flow the midwest is the place to be but does not have the population growth/job creation of the Southeast and Texas for the most part but there are some exceptions. 

Lower population growth usually means slower appreciation.

[Evan Hopple]

Columbus, OH is a fun city to live in and plenty of tech jobs moving here. I would look for a househack here

[Ryan Cheek]

Hey Andy,

Congrats on your first house hack in Sandy, Utah, and welcome to the world of real estate investing! It's awesome that you're thinking ahead and considering more affordable markets for your next investment.

I’m actually focused on the Indianapolis market, which has a lot to offer for investors like you. Indy is great because it’s got that Midwest affordability but also strong growth potential, especially in areas near universities and the downtown core. The entry point for multi-family properties here is generally more manageable, and you can often find solid deals that won't require you to liquidate your stocks.

Your goal of $10k a month in cash flow is definitely achievable, especially with the right strategy in a market like Indy. I’d be happy to share more about what’s working here, and we could explore if this market aligns with your long-term goals.

Feel free to reach out if you want to dive deeper into what the Indy market has to offer. Wishing you the best of luck on your journey to 10k/month!

Best, Ryan Cheek

[Jim K.]

@Andy Okamoto

One cautionary note: if your idea of "cash flow" is $10K in net operating income, $120K before taxes in your pocket every year off your rental property, well, if it happens to you in 10 years, it will be a low-probability event with a lot of lucky breaks and eventually will likely ruin your life when you make a misstep because you assumed your lucky break was the norm.

If you're serious about moving out here, at least look at the Pittsburgh area and its proximity to Carnegie Mellon (tech) and UPMC (health care).