Looking for Feedback on My Next Move in Life

37 Replies

My partners and I in Salt Lake City, UT are getting ready to head out to Cleveland to look at some properties to invest in, and at the same time, I am separately preparing to buy my own first property on my own. I've been looking at different options for FHA and FHA 203K to house hack my way into a duplex in Salt Lake City.

But lately, I've been thinking about the possibility of exploring options in Cleveland to house hack a 4-plex because property is much cheaper than in Salt Lake City with the opportunity for better cash flow. I have been thinking about trying to house hack the same way in Cleveland, using an FHA or FHA 203K loan and living in it for a year.

I work remotely, so I am not necessarily tied to Salt Lake City in the short term, although I do plan for it to be my home base in the long term. I am trying to figure out the optimal way of scaling my real estate business, and this seems like it could be a possible way to jump start my real estate portfolio.

I’d love to hear what others think about this idea, and if anyone else has uprooted their life temporarily to house hack in a different part of the country for their real estate career.

Thanks in advance!

Hey @Daniel Goldfinger , sounds like you have some great options on the horizon.  The one thing I can tell you is to make sure you WANT to live where you are going to be.  Cashflow doesn't mean that much if you don't like living in an area.  I grew up in Cleveland, lived in Denver, and now Portland.  I can tell you they are all very different cities so while you are in CLE, make sure you can see yourself living there for 5+ years.  

Thanks @Brad Hammond . I grew up in LA, have lived in SLC for 10+ years, and am just kind of trying to open up my options in the short-term while I advance myself professionally. And I can appreciate what you’re saying about wanting to live where I’m going to be. I would otherwise be doing out-of-state investing from Salt Lake City, which is the initial plan. But as I think more and more about it, I feel like I may be limiting myself to my options and opportunities because I’ve always had this assumption with myself that I am going to stay in Salt Lake City indefinitely.

I also travel quite a bit for work (when it's not a pandemic), so my living situation has mostly acted as a base/storage unit for the past few years. And if I moved my base/storage unit to somewhere more affordable while hacking the FHA one-year rule, it might open up some more opportunity for the next steps.

Can I ask why you say 5+ years? 

@Daniel Goldfinger Thank you for sharing. What an exciting time in life! I wrote a BiggerPockets blog post last year called The Journey To Financial Independence - A Few Life Hacks. In this post, I cover what helped me in terms of hack hacking, single-family investing, multifamily investing + other cash flow strategies. Hope this helps. Best of luck  

That all makes sense, sounds like Cleveland might be a good option for you.  Now that I'm rethinking it, 5 years might be a bit much but I'm assuming you would want to live in the 4-plex for at least 2 years to avoid paying tax on the gains when you sell.  You could always move out after that and rent your unit.  

I would recommend looking down south as population and jobs move towards the warmer weather. Price isn't everything. There is a reason houses in Cleveland are cheaper. More supply than demand.

If you want to be in SLC in the long term, I'd look at getting something here. We have a lack of housing inventory, we are running out of buildable lots, have a very young population and large family sizes. The pressure on housing will only push prices up. They're not building new land and people won't stop breeding anytime soon. Prices have increased 50% in the last 5 years. If you wait too long I believe it'll be crazy expensive in a few years. I know nothing about Cleveland.

When investing in real estate it is never a bad idea to consider job growth, income growth, and population growth. When a city or region is experiencing all three, your real estate investment is swimming with the current rather than against. PcW in their Emerging Trends in Real Estate 2021 lists Salt Lake City as number 7. The Milken Institute report: Best-Performing Cities 2020: Where America’s Jobs Are Created and Sustained Salt Lake was listed as number 10 in 2018. In their 2020 report Salt Lake fell to 20th but 20th out of 200 is still not bad. In comparison, Cleveland is 175 and Columbus 100.

As Joe Splintrock already mentioned, price isn’t everything and there is a reason the Cleveland and Columbus are not high on the list of job creators. Having said all that real estate is local and there could be some very good opportunities in Cleveland and Columbus – be sure you know the local market through and through.

@Daniel Goldfinger Cleveland is a great city, but sadly the demographic profile is pretty pitiful....there is a silver lining, and I spend time in Cleveland myself (only in the summer, lol), just be prepared for the market and stick to the proven locations. The most risky place I would consider would be Ohio City...pretty hip spot...but there are some very nice suburbs in Cleveland as well.

If you are looking for quality of life, stuff to do, growth and a thriving industry, looking to Cincinnati or Columbus is always a thought. 

Best of luck

I personally grew up in Columbus so don't need to look elsewhere for investment purposes but I know of a decent amount of people who did leave and house hacked here in the city and a few others who are in the process of executing on it. It all just depends on your goals and if like the city you will be investing in then it will most likely work out pretty well for you. @Daniel Goldfinger

@Daniel Goldfinger

Not sure how you identified Cleveland in the first place, but there are reasons the population is declining. As others have said, when you’re scoping out investments, also visit neighborhoods you might live in. I lived in Lakewood and Cuyahoga Heights- decent by Cleveland standards. If you enjoy wilderness and the mountains, you might struggle in Cleveland.

Originally posted by @Brandon Sturgill :

@Daniel Goldfinger Cleveland is a great city, but sadly the demographic profile is pretty pitiful....there is a silver lining, and I spend time in Cleveland myself (only in the summer, lol), just be prepared for the market and stick to the proven locations. The most risky place I would consider would be Ohio City...pretty hip spot...but there are some very nice suburbs in Cleveland as well.

If you are looking for quality of life, stuff to do, growth and a thriving industry, looking to Cincinnati or Columbus is always a thought. 

Best of luck

I second living in Columbus over Cleveland. I like visiting my buddies in Cleveland but I would not want to live there.

 

@Remington Lyman

Funny you say that. I just was in cbus with the wife for a weekend. Feels like a watered down white washed version of Cleveland. I guess it all comes down to what people like. I like the grit.

With that said - for years people are beating the ohio drum. Investing in cle today will take far more finesse than it did a year+ ago.

Same in cbus?

Originally posted by @Kyle Parks :

@Remington Lyman

Funny you say that. I just was in cbus with the wife for a weekend. Feels like a watered down white washed version of Cleveland. I guess it all comes down to what people like. I like the grit.

With that said - for years people are beating the ohio drum. Investing in cle today will take far more finesse than it did a year+ ago.

Same in cbus?

Lakewood,ohio city became b+, a- areas that do not meet the 1 %rule so are not a target for investment. The target now is the c, b and especially the C one for CF.... 


Inspite what people say about not growing Cleveland has experiences increase in prices for the several years and it's hard to find a good investment there... 

 

Have people seen any correlation between property value increases and opportunity zones? On Ohio’s govt website, it shows Cleveland and Columbus both with quite a few OZs. @Remington Lyman @Kyle Parks @Brandon Sturgill  - would like to hear what you guys think in regards to OZs and rebuilding of your respective cities.

@Ari Hadar you mentioned that Lakewood and Ohio City have kind of reached their capacity in a sense. Which C neighborhoods do you see next? 

@Daniel Goldfinger

Flip a coin. I suffer from "optimal syndrome" myself, and I think when we look back 30 years from now the important thing will have been that we made the jump not the details of it. If you look at data you can convince yourself either way what is the best market to start in. Live wherever you enjoy more, life is short! Just my 2 cents.