Bad idea to put all your money in and hope for appreciation?

[Julie Chai]

I own two properties, one is my primary and the other is a rental. Currently, my sister is my tenant and underpaying the market value but it was in good conscious to help a family member during the covid pandemic and I can trust her to take care of the place. Basically, I'm breaking even or maybe even losing a few hundred a year but it has great equity in it. Being that the real estate market is increasing, I want to purchase a third property before the market gets too crazy and trying to beat inflation. I am having a hard time getting a loan or even refinancing because my 9-5 income is too low, BUT I have a good amount saved up in my investment funds. My two properties are in California and I'm considering investing in a SFH in Houston, TX, for my third rental property.

Since I can't get a loan or refinance, is it a bad idea to put all my saved hard money into a SFH and buy all cash? My goal is not really for cash flow but to build some appreciation out of it while someone else is renting and paying the mortgage for me.

Also, is Houston, TX a great city to start investing in out of state?  Any other suggestions are greatly appreciated.

Thanks BP team!

[Jay Hinrichs]

nothing wrong with paying cash for a rental if it gets you the return your looking for. 

to hope for appreciation in a market with little to no historic appreciation might not be the smartest thing.

but to invest in a market were you have researched and have a good idea that there will be apprecation based on ecnonimic factors is where the money is made in this game.  UNLESS U can borrow and scale then cash flow is more important so you can use that income to pay your debt.