Building Residential Portfolio and Pivoting to Commercial Real Estate

[Timothy Lawrence]

Hello, my name is Timothy (22). I own a townhouse in Arbutus MD, and I have been house hacking since this month. I save a lot more money than I would if I was renting in Fairfax VA. I don't think I would cashflow after moving out…maybe breaking even? I am thinking about what strategy to use in the future. Here are some options I have thought of:

1. 1. Save money for a decade or so to afford a house in Montgomery County (Hyattsville, Silver Spring, Rockville, etc.) and rent out rooms. Must be cash-flow positive, so I would need to bring in one hell of a downpayment unless interest rates decrease.

1. 2. Do some more digging into Baltimore County and surrounding areas. See if there are cash-flowing properties to be acquired…. in less desirable neighborhoods I suppose (Glen Burnie, Dundalk? I don't know)

1. 3. Out of State Real Estate Investing. Pick another state where my company has an office and see if there’s an opportunity for cash-flowing properties. Opportunity to house hack again and move to get the pay raise if need be.

1. 4. Save money for a decade, build equity in house…sell house and use savings + capital from sale to purchase house in Montgomery County MD. Then I can just househack again

Bigger Picture: I like the idea of building equity in multiple investment properties and then sacrificing some to pivot into affording a down payment with a commercial real estate building. It just feels like there’s quite a bit to consider…my salary and time. I can be patient, but I like to take action quickly.

If I were to save for a decade (reserves + downpayment + closing costs), would I have been better off acquiring out of state properties or essentially being a bit of a slum lord to scale my portfolio faster to build equity?

Anyone have any thoughts on what you would do if you were in my shoes.