Aspiring OOS Investor from San Diego, CA

[Anders Helgeson]

Hi everyone! My name is Anders. I'm living in San Diego and like a lot of California city-dwellers, it doesn't look like it makes sense for me to buy a house here. I like Cincinnati and the Northern Kentucky area as a market quite a bit. I also love the BRRR method and ideally would be able to get that rolling from the start.

My long term goal is financial independence from my W-2 job (I am very motivated), but my short term goal is to reach a point where I can cover my monthly bills with RE income. That said, I believe cash flow is going to be my primary driver on my first few deals (1% rule). I've spent quite a bit of time on BP without posting, doing a bunch of research and think I have a good handle on the process as a concept. 

If anyone in San Diego has experience with out of state BRRRs, I'd love to buy you a socially-distanced lunch and pick your brain. Also, if anyone is particularly averse to Cincy or NKy, I'd love to hear why!

[Ashley Stieger]

Hi @Anders Helgeson, nice to "meet" you! I am based in Denver and have long-distance/BRRRR properties (including one in Cincinnati). I think there are many benefits to investing in Cincinnati; including lower entry point than San Diego, higher cash-on-cash return, ability to BRRRR, etc. And if you build the right team, including an investor-friendly RE agent, contractor(s), strong property manager, inspector, and lender, it can be a great investment. These upsides also come with more risks, IMO, so make sure to look at all variables before jumping into an unfamiliar market.

However, if you are truly looking to become financially independent, consider what @Mark Frattini mentioned: HOUSE HACKING. This doesn't mean you have to chose to only invest in your current market, but rather gives you more ways to optimize your portfolio, take advantage of favorable lending terms due to buying a primary home, and put a much smaller % down than if buying an investment property. Also, I'm not sure what the average rent is in San Diego, but I'm guessing it's pretty high! Living in a house hack, you will likely reduce your living expenses quicker than buying multiple cash-flowing investment properties… I've seen this work first-hand with house hackers in Denver (which similarly is a high appreciation, lower cashflow market than the midwest). If interested in learning more about house hacking in your area, reach out to an investor-friendly Realtor in San Diego who has experience looking for these type of properties, as it's important to get a local's perspective. Best of luck on your REI journey!