Invest in doors or invest in your door?

[Haider Abdullah]

I live in SoCal which is pricey. I have cash...do I start investing in doors outside of CA where $100k cash can buy me a leveraged quad, or do I put down on a high ratio loan in SoCal and buy a house for $700-800k?

Various schools of thought here:

- invest in our own home, stop paying rent ($3400pm in Irvine) and pay your own mortgage. Plus, it’s CA, so values will always be strong and appreciation will always be there

- grow equity, leverage with heloc and invest in a year or so...

- or buy maximum number of doors in less expensive states and start cash flowing immediately and creating a multiple door strategy off the bat..

Our ultimate goal is to have dozens of doors, if not hundreds, however, the first step is so crucial.

I honestly don’t see a “wrong” here but I’d love to get the community viewpoint to truly assess both options (or others) and then just get into it ASAP.

Worst thing to do is a analysis paralysis and ultimately do nothing.

Thank you BP community!

Haider

[Edward Liu]

I have sold all my properties in CA in the last 2-4 years and now all my rentals are out of state.   So it tells you my answer.   

Invest for cash flow, not for appreciation. I highly doubt a $700k SFH can cash flow if rent is only around $3500. Many people assume CA real estate only goes up, which is not the case. Many areas in CA had price drop of 40-70% during 2008-2011.