Newbie: Finding the correct state

[Katherine Velazquez]

Hello BP,

I am a newbie and I want to be able to achieve my first rental property in the next 6-12 months. I know I want to invest in single-family/ Small Multi-family homes and use the buy and hold strategy. I have spoke with a brokerage and my purchase range is 100-150k but I am struggling to figure out what state would be best for me. I current live in San Diego and the market is too expensive for me to buy in my own market. Do I just go state by state and evaluate each one ? There has to be a smarter approach, any tips !

Thank you in advance !

[Dan H.]

Quote from @Katherine Velazquez:

Hello BP,

I am a newbie and I want to be able to achieve my first rental property in the next 6-12 months. I know I want to invest in single-family/ Small Multi-family homes and use the buy and hold strategy. I have spoke with a brokerage and my purchase range is 100-150k but I am struggling to figure out what state would be best for me. I current live in San Diego and the market is too expensive for me to buy in my own market. Do I just go state by state and evaluate each one ? There has to be a smarter approach, any tips !

Thank you in advance !

Do you currently own the house you live in? House hacking via an FHA loan in your local market can b3 a far better route than renting and paying down someone else's mortgage.

FHA loans are only available as owner occupied. FHA loans are up to 96.5% LTV versus 80% LTV available for out of state investing. This implies your limited assets go much further locally than OOS.

You live in a market that has produced near top in nation return for buy and hold for this century (source Case Shiller). 

Consider the challenges of investing out of state as well as the returns that have been achieved by local investors before venturing out of state.  

Good luck