It would be our preference to invest in upstate NY because we could drive there relatively easily, but if there are better deals elsewhere, we would be more inclined to go with option (1).Hi Bethany, if you're investing in NY, unfortunately the price range is crazy high and you won't find any cash flow.

Also, I've always wondered why arbitragers don't negotiate an option to buy upfront?

Still, I think you'd find it difficult to find one that would be a good long-term investment unless you had another ~20-30 years to go, it's at least cash neutral, and you don't plan to hold it too long (to avoid too much investment loss and before you get to the point where it's unsellable because of too few years left); that's another way of saying that maybe it suits your cash needs in the near-term or is at least less of a pill to swallow than other options until you find something that's more of a sensible long-term play

I do agree with @Jules Aton though, the best option may be to wait and save up for your down payment.

If you ever need insights on financing options for rental properties, including DSCR loans to scale your portfolio, I’d be happy to help.

However, we will likely need a property manager to assist with some facets of running this rental (since we would not live locally) and would primarily market it through platforms such as Airbnb and VRBO to start, (eventually setting up a direct booking process).Here's our question for those who have experience in STR's or who might be involved in a similar scenario: How challenging is it to meet the material participation hours needed to achieve active status?

I would like to find a way to generate additional income and am exploring options other than having a long-term roommate.

Another option is to estimate value based on potential income and market cap rates, which can give you an investor’s perspective.

If you plan to invest in multiple states or require advanced asset protection, consult a CPA or attorney to explore options like a holding company structure.

To maximize your investment, use financing options like FHA or conventional loans, analyze deals based on cash flow and cap rates, and network with local investors through REI meetups and BiggerPockets.Good luck!