First few investments

[Kate Jones]

Hi everyone. I am looking to buy my first house-hacking property. I currently need just a few more months to come up with some more money in order to see what my significant other and I can do. In the meantime, we are looking into a few states. We can afford places like Kentucky and Ohio. But, we also saw some opportunity close to us here in New York and are continuing doing research on the New Jersey real estate market.

NY is highly competitive just like any other state but it is very expensive here. On the other hand, if I find one property that is profitable, get an FHA loan, and continue to make more money here than move to another state for my second or third property, will that be a mistake? Should I continue to just build my portfolio in the same state for maybe the first 5 properties and then go to another state? Wouldn't taxes for my business be based in New York because I started here or would it be better to move to a place like Kentucky where I can afford more of a downpayment or any fixtures needed for my first few properties and then continue to invest in other states after I bought a few properties in one state?

-I plan on having 5 properties before I register it under an LLC.

Hope this makes sense!

[Greg Scott]

You did not state this but it sounds like you are able to work remotely so are not tied to any one area.

You have to ask yourself what gives you the best quality of life, both short and long term.  Because it is cheaper, you will likely have more investment opportunities in OH or KY, but if you are traveling back to NY all the time for family events, that might not make sense.

You made a comment on taxes and later an LLC. The taxes for the properties will be based on where the property is located. For income tax purposes, you would be better moving to a low tax state. Also, I wouldn't be in a hurry to form an LLC. Get good insurance and be sure you know the downsides of putting a property into an LLC.