where to buy second mortgage?

Question

Hello, I am currently a Philadelphia resident and looking to move to a warmer state with growth in tech jobs. I am thinking among CA, WA (Seattle) and TX. I am not sure which state to consider. And even in the state, which city. I purchased a single family rental in philly 6 months ago and handed it over to property management company. I am still struggling to get tenant. If I don't get positive cash flow, I am hoping at least it will pay for the monthly mortgage.

Now, I am planning to move to a place where, after a year down the line, I can pay mortgage instead of rent. So a city where I can afford a second mortgage without being broke, and take advantage of positive job growth in tech, startups since job is important to me. Some cities I have in mind are:

1. Seattle (but very close to mount rainier which can errupt in near future. Even if Seattle isn't at immediate risk, why risk it..? i heard Seattle is also hostile to landlord but a lot of people are moving there).

2. Sunnyvale, San jose, Sacramento - other norther CA area. But I highly doubt if I can afford a second mortgage in CA. But if the potential profit outweigh the risk, I may be able to convince one or two of my friends to invest with me at the property.

3. Dallas or Austin - These cities in Texas are becoming more investor friendly and lot of techies are moving here or nearby cities. I just worry about the politics, lack of diversity and how welcoming the place will be to immigrants. Since this future property will also be a long term investment, I am trying to find a place where I will be comfortable living, growing and investing.

The plan is, I will rent there. If I like the area, I will invest in buying a rental property. And after investing, I will most likely continue to stay in that or nearby area. I've been in cold state for so many years that I am longing for a warmer weather. But if you think there are other cities in other state meet most of the requirements other than the weather, please share that as well. At the end of the day, good job growth and good and affordable investment opportunity will be more important.

Thank you so much in advance. I really appreciate your time.

Greg Verge · Answer

Lived most of my life in Seattle area and just wanted to clarify that most people are not very concerned about Mt Rainer erupting. The Seattle/Bellevue area is far enough away to the North that an eruption would not directly cause much if any damage. Biggest risk is to people living around base of mountain and surrounding rivers as the debris flow would cause massive destruction so staying North of Tacoma avoids the affected rivers. As far as natural disasters go we are much more concerned about the off shore Juan de Fuca tectonic plate which has a proven history of causing large earthquakes and tsunamis that affect the whole Western part of the state. Can't provide any insight into Seattle rental laws but but sure seems the City Council is hell bent on messing everything up for everyone with mandatory acceptance of first received (must be timestamped) application that meets minimum criteria.

Louis Chan · Answer

I agree with @Greg Verge. Our next big earthquake can be anytime now. Whether it'll be big enough to cause any major damage is anyone's guess. I live and have properties just outside of Seattle. Earthquakes are a concern, but not enough for me to spend extra on earthquake insurance at this time, maybe in a couple years. I have a friend who owns inside Seattle city limits. He says city council is always trying to screw them over. Many of the surrounding suburbs are much more landlord friendly.

Account Closed · Answer

Entirely depends on your budget.  I'm from the Bay Area and have lived most my life outside/in Seattle.

A Few things: California Laws, Regulations, and Taxes are killer, especially upfronts. I'm unfamiliar with Sunnyvale, but San Jose has an extremely high barrier of entry in terms of capital.

Seattle isn't cheap either, but Washington offers much more favorable taxes (0 state personal income tax) and is definitely less restrictive compared to California. As for Tech, Seattle has offices of most all the major companies in Silicon Valley. Microsoft & Amazon Main Campuses, Apple, Google, etc. And in terms of the housing market, it seems to have recovered much better than CA tech exodus cities.

Can't claim much knowledge about Texas, in Housing or Tech markets. But cost of living, taxes and regulations all seem to be the least restrictive of the three areas you've listed.

Hope this helps.

Lynn Wise · Answer

@Mahmuda L. That’s the million dollar question! I don’t see growth in Austin slowing any time soon, so I see it is a very good market to buy in — especially for the long term.

Lynn Wise · Answer

@Mahmuda L. If you land on Austin, let me know! Texas is actually one of the most diverse states in the U.S., so don’t let the views of a few backwards Texans taint your perception of the whole state. My husband is from the Middle East, and though he has unfortunately had a few people say hateful things to him in Austin the vast majority of his experiences have been good here.

Account Closed · Answer

@Lynn Wise thanks for sharing that. Looks like Austin TX has a higher cost of living than Philadelphia, PA. If I wait few years to buy a house in Austin, do you see the price going up significantly high that it will reach close to the prices for northern CA houses? I wonder if CA house prices will go down as Austin house prices go up making CA more friendly to the buyers. Or is it too radical of a change that will take much longer to occur?

Account Closed · Answer

Account Closed thank you for your feedback. At this point, I have a very limited budget so I will have to save up some money to even afford a house in Austin, TX let alone CA or WA. I took some closer look on Zillow and checked the houses recently sold in CA and TX to conclude that.

where to buy second mortgage?

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