House Hacking to financial independence

[Mykhailo Strelchenko]

Hello everyone!

I am lucky I stumbled on the BP community of like-minded people! Hope to find some bits of advice from giga brains 🧠 :))

I am a 23yo newbie to RE. Last winter I came to a realization that all the gains, benefits, and economic activity society generates eventually end up in land value. Thus, owning a piece of property in the right location is the only way to take advantage of those gains.

I have read a few books on RE investing and it seems like House Hacking would be the most appealing option to kickstart my journey to financial independence.

First, I am not local to this country and don’t know much about local markets. Any advice or info would be extremely gratefully received!

Currently, I live/work in Montauk, NY. It is a seasonal and expensive place (even though I like the vibe of this small town), I am looking to relocate and start my RE investing journey by the end of this year. (November/December). I would like to do a house hack but I am struggling with determining the best metro area for my needs. Scott Trench mentions in his book “Set for Life” that a median wage earner should move out from the most expensive cities in the US unless his housing expense is justified by high earnings. I work in hospitality and I think I could make the same income elsewhere while saving on taxes and living expenses. (I make around 60-70k/year).

Here is a list of things I look for in my first house hack:

• Location with high-quality tenants. (I plan to go with rent by the room. Don’t want to end up in a place where it is hard to rent the rooms out)
• Appreciation. (people/businesses are moving to the area, more jobs, new public infrastructure is being built)
• Affordable house price. (Looking for areas where I can still find deals under $400k)
• House has to be in decent shape with little to no work required. (Recently remodeled would be perfect)
• Needs to have restaurants/bars close by.
• Cashflow. (As long as PITI is covered by rents and my living expenses are $0 - $300 I am happy)
• Scalability. (I have a long-term view and want to stick with one area for a few years)
• Diversity. (Metro area should have a diverse economy, not just tourism, etc..)
• New infrastructure project. (New roads, train stations, public transportation, schools, hospitals) Preferably the ground has not been broken yet but the bill is approved.
• Population growth.

Doing some Google searches and reading a few articles these are the locations I have found to be of interest to me:

• NC; Research Triangle (population growth; big businesses are moving in)
• AZ; Phoenix, Mesa (huge migration from CA; EV manufacturers are moving in)
• TN, Nashville (strong population growth; tech gains moving in)
• CO, Colorado Springs (strong job growth, beautiful outdoors)
• NV; Las Vegas (high-speed rail from Los Angeles to Las Vegas scheduled for completion in 2027; people are moving in from CA)
• TX; Dallas, Houston (Dallas to Houston high-speed rail scheduled for competition in 2026; huge population growth, a number of infrastructure improvement projects)
• FL; West Palm Beach, Tampa, Orlando (population growth; huge hospitality and truism industry)

I tried to keep it as concise as possible but it still turned out to be quite a read. Thanks to everyone for taking the time to read through it.

Should you have any other markets in mind that I should look into, please feel free to list your suggestions. I am open to any places with a combination of vibrant music, arts, food & drink scene, outdoor recreational opportunities, and a strong job market.

Thank you! 🙏

[Bruce Lynn]

I think any of the cities you mentioned fit most of your criteria and are good picks.

For the long term I think I might skip NV and AZ as water at some point will be an issue there most likely.

High speed rail for Texas is likely a bust for the current time.  I don't think that would have generated any more significant economic activity anyway.

My guess is you will need to lower your price point unless you have a ton of cash to put down.  Typically you can only borrow about 4 times your income if you don't have much debt...some people suggest 3x.   So chances are you will want to be more like in the $250,000-$300,000 range for pruchase price.   So that may cut some of the cities on your list like West Palm Beach and Colorado Springs.

In todays world I don't think your tenants will cover your rent or allow you to live for $300/month.  I'd plan on paying your 1/3 or 1/4 of the rent if you buy a 3 or 4 bedroom house.

Bank as much cash as you can between now and then.  It will give you more options.   HouseHacking is an excellent way to start.