First of all, I just want to say thank you to everyone on BiggerPockets for sharing your experiences and knowledge. It’s been incredibly helpful and inspiring.
My wife and I recently graduated, and we’re currently renting. Our combined income is just under $150,000 per year, and I’ve inherited about $160,000 in cash from my grandparents.
Now, I’m trying to figure out the smartest way to use this money.
I work in Boston, Massachusetts — one of the most expensive real estate markets in the country — and it feels nearly impossible to build a portfolio of investment properties here. At the same time, we’re planning to start a family soon, so living in a good, family-friendly area is very important to us.
Here’s what I’m currently considering:
Option 1: Buy a multifamily property under $800,000 and live in one of the units.
Option 2: Buy a condo or a single family under $550,000 with 20% down, then use the remaining funds to invest in an out-of-state rental property.
I’d really appreciate any advice, ideas, or things I might not be thinking about.
Thanks so much in advance!
If I were in your shoes, given your budget and the high prices in Boston, I'd see if there was a way to partner with someone on an out of state investment! Whether from an LP position or other, there's deals to be made where you can make at least 15% on your money within 12 months. Selfishly, that's what we offer our investors in my business!
I would advise against this advice. Long distant investing and partnerships come with a lot of risks. Add to that your inexperience and it could be both financially and mentally disastrous. It's not necessarily a bad plan, but not what I would advise given your current circumstances.
My initial thought is to see if you can work remotely or in another more affordable city. If not, I'd put a good down payment on a primary and then I may consider the stock market for my investing. If you're set on investing in real estate you may have to look to the Boston suburbs. You can definitely invest long distance, but I personally like to be able to get to my properties within a reasonable amount of time.
Real Estate Coach · Chicago, IL · Member since 2020 · 171 posts · 64 votes
1y
If I were in your shoes, given your budget and the high prices in Boston, I'd see if there was a way to partner with someone on an out of state investment! Whether from an LP position or other, there's deals to be made where you can make at least 15% on your money within 12 months. Selfishly, that's what we offer our investors in my business!
If I were in your shoes, given your budget and the high prices in Boston, I'd see if there was a way to partner with someone on an out of state investment! Whether from an LP position or other, there's deals to be made where you can make at least 15% on your money within 12 months. Selfishly, that's what we offer our investors in my business!
I would advise against this advice. Long distant investing and partnerships come with a lot of risks. Add to that your inexperience and it could be both financially and mentally disastrous. It's not necessarily a bad plan, but not what I would advise given your current circumstances.
My initial thought is to see if you can work remotely or in another more affordable city. If not, I'd put a good down payment on a primary and then I may consider the stock market for my investing. If you're set on investing in real estate you may have to look to the Boston suburbs. You can definitely invest long distance, but I personally like to be able to get to my properties within a reasonable amount of time.
Real Estate Consultant · Boston, MA · Member since 2010 · 86 posts · 40 votes
1y
Hey there, welcome to BP and Boston!
Both options could work depending on your goals and where you’re looking.
$800k for a duplex is doable in areas like Everett, Malden, Chelsea, Revere, Randolph, etc. but you should budget for repairs/renovation. If you’re planning to have kids soon, then I’d look at the condo option. Areas with decent schools will be expensive and 550k ain’t going to get you much unfortunately.
I’ve been house-hacking around greater Boston for quite a bit and happy to share some lessons learned. Ping me on BP.
Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
1y
@Account Closed I've been house hacking in Beverly, just north of the city, since 2020. It was the perfect investment for me and my family. I recommend house hacking through and through. My first duplex was solely focused on the numbers, the second, because I knew I was going to start a family in it, was more emotional. It's less of a stellar deal, but has given me a lot of different options and space to grow in.
I would recommend the multi family route to begin with. A condo for that price will be more challenging and less likely to be in a stellar area, plus condo fees can be a killer and you won't experience the same appreciation as a multi. Happy to chat through my experiences.
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
1y
@Account Closed
You're in a strong position—great income, solid cash reserves, and clarity on your goals. Option 1 gives you a chance to house hack in a high-cost market and start building equity fast, especially with Boston rents offsetting your mortgage. Option 2 offers diversification and potentially better cash flow, but requires more management and knowledge of out-of-state markets. If you're leaning toward starting a family soon, Option 1 may offer more stability and long-term upside while still getting your foot in the investing door.
Good luck!
Wale — Houston-based investor agent working with buy-and-hold clients.
Real Estate Agent · Pittsburgh, PA · Member since 2020 · 83 posts · 76 votes
1y
Hey @Account Closed! I really appreciate where your heads at here. If you're staying in Boston for the long term then I 100% believe purchasing a multifamily and living in one of the units would be a great first step. Outside of that, as folks mentioned here, investing remotely in a market riper for investing would be the way to go. I've worked with a lot of investors that buy in Pittsburgh who are in a similar situation because their local market just doesn't make sense to buy rental properties in especially if you're looking for some cash flow. So, they look in cities like Pittsburgh, Cleveland, Detroit, etc. The key there in my opinion is pull all your resources together in whichever area you choose so that you can be efficient, effective, and move forward comfortably. This would your experienced investor agent, contractors, property management, etc.
I really appreciate your mindset here. If you're planning to stay in Boston long-term, purchasing a multifamily and living in one of the units is a fantastic first step toward building wealth through real estate.
Outside of that, as others have mentioned, investing remotely in a market that’s more favorable for cash flow can be a smart move. I’ve worked with many investors in similar situations who buy in cities like Pittsburgh, Cleveland, or Detroit because their local markets simply don’t make sense for rentals right now.
Whichever market you choose, the key is building a strong local team—an experienced investor-friendly agent, reliable contractors, and solid property management. Having the right resources in place will help you move forward with confidence and efficiency.
Memphis, TN · Member since 2024 · 234 posts · 100 votes
1y
Hi @Account Closed!
Congrats to you and your wife on the next chapter, and kudos for being so intentional with your inheritance. Both options you’re considering have merit, but it really comes down to lifestyle vs. leverage. If your top priority is putting down roots in a family-friendly area near Boston, Option 1 could give you stability and let you house hack a bit to offset the mortgage. Though you may be cash tight afterward.
Option 2 gives you more flexibility! You’d still own a home in a market you know, but you’d also get to put your remaining capital to work somewhere with stronger cash flow. Markets like Memphis are a great fit for that: fully renovated rentals under $150K, strong tenant demand (including Section 8), low property taxes, and landlord-friendly laws. Many investors are pairing a primary residence with an out-of-state rental to balance appreciation and income, especially when local investing doesn’t pencil out.
Either way, you’re in a strong spot! Just make sure to run the numbers both ways, think about how active you want to be, and plan around the family goals you’ve got on the horizon. Happy to share more if you want to explore what a $100K–$150K out-of-state rental can look like in Memphis!
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
1y
I'd go option 2, provided the property cash flows upon move out or you plan to live in the unit for a long time. You can put less down which will keep your cash available.
if you can, I would encourage you to max out retirement accounts and potentially do a backdoor roth if necessary
Property Manager · Boston, MA · Member since 2017 · 32 posts · 14 votes
1y
Talk with a local real eatate agent that has lots of experience in investment property transactions. That person can give you insights into whats available and achieveable. A good morgage broker who has access to varied products can also walk you through how to leverage your cash best. If you'd like recommendations, PM me. Utilize the state's First Time Homebuyer program. Boston proper is an appreciation market whereas secondary markets like Fall River, Worcester, and Lynn can still cash flow. Above all, do something that feels right to you.
The key thing here is to run the numbers. Everyone is guessing (based on experience). My opinion, with no numbers is that buying a multifamily property is best for three reasons: 1.) Househacking tends be the lowest risk, highest reward activity in real estate investing provided your lifestyle can afford it. 2.) Boston is a tier 1 city which, to me, means it's a superior market to invest in compared to anything you can get out of state. 3.) Investing where you live is typically best from an operations and learning perspective.
With that said a cursory look around the market suggests you'll get a 2/2 duplex for ~800k (is a 2 bed 1 bath enough for you for at least the next year?) The units will rent for 2500-3k each. Your monthly payment with 20% down is about 4700, so you probably end up ahead house hacking vs. renting.
When running your numbers you should also consider something in the 1.2million dollar range and putting 10-15% down. For instance, if you did something like this: 121 George St, Roxbury, MA 02119 | MLS #73398644 | Zillow with 10% down, your cash flow numbers would end up about the same as above, you would get an extra bedroom and would end up with higher leverage (and therefore higher returns) in the beginning. That is your 4% appreciation increases your network 48k/year instead of 32k/year. And at 10% down, you would still have 30k in reserves.
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
1y
Quote from @Account Closed:
First of all, I just want to say thank you to everyone on BiggerPockets for sharing your experiences and knowledge. It’s been incredibly helpful and inspiring.
My wife and I recently graduated, and we’re currently renting. Our combined income is just under $150,000 per year, and I’ve inherited about $160,000 in cash from my grandparents.
Now, I’m trying to figure out the smartest way to use this money.
I work in Boston, Massachusetts — one of the most expensive real estate markets in the country — and it feels nearly impossible to build a portfolio of investment properties here. At the same time, we’re planning to start a family soon, so living in a good, family-friendly area is very important to us.
Here’s what I’m currently considering:
Option 1: Buy a multifamily property under $800,000 and live in one of the units.
Option 2: Buy a condo or a single family under $550,000 with 20% down, then use the remaining funds to invest in an out-of-state rental property.
I’d really appreciate any advice, ideas, or things I might not be thinking about.
Thanks so much in advance!
Hey Myoungsu, welcome to BP — and big congrats to you and your wife on graduating and being in such a strong financial position early on! Both of your options have solid logic behind them, and it really comes down to your comfort level, long-term goals, and how active you want to be in managing real estate right now.
Option 1 (buying a multifamily and house hacking) is a great way to keep living expenses low while building equity and getting hands-on experience. In Boston that’ll likely mean dealing with higher prices, more regulation, and a more tenant-friendly environment — which can work, but it’s important to know what you’re signing up for. The upside is you’re close to the property and building wealth through appreciation while learning the ropes.
Option 2 opens the door to more cash flow potential. Buying a more affordable primary and then investing out-of-state could allow your inherited funds to go further — especially if you target landlord-friendly, cash-flowing markets. I moved from Portland to Columbus, Ohio in 2020 and now own 10+ rentals here. It’s still one of the few markets where you can find long-term rentals between $130K–$180K that hit the 1% rule and cash flow right away. Plus, Columbus is seeing huge job and population growth with companies like Intel, Amazon, Google, Honda, and more moving in. I’ve worked with a lot of out-of-state investors here, and with the right team (agent, PM, lender), it’s very doable without needing to live nearby.
Another thing to think about: you could even combine both strategies by house hacking now, then pulling equity or saving up to buy out-of-state in 12–18 months. Either way, you’re in a great spot with capital, income, and a thoughtful approach. Happy to connect and answer any questions you have!
Investor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
1y
How about option 3 - investing in real estate through passively investing as a Limited Partner in syndications? Do you have any experience as an active real estate investor? Do you want to spend the time and resources it takes to be an active real estate investor?
Option 1 will be a very active position - especially if you are living there. How will the time required effect your jobs and the family you want to start? Even if you hire a property manager, owning a multifamily is an active job.
Option 2 - buying an out of state property will also be active and you will need to learn how to effectively invest outside your state.
There are plenty of people who do both option 1 and 2 on this platform and they do very well at it. I would guess that all of the successful people who do either of those have some kind of competitive advantage - either they are good at swinging a hammer, have market knowledge or something else that sets them apart. As an active investor, you will be competing against these people. You might be successful, you might not - but you will be required to spend a lot of time, effort and money to make this work.
Investing passively in real estate syndications is different - you get the benefits of real estate, but you do not manage or control the asset yourself. You invest with a professional asset manager who selects that asset, negotiates and completes the purchase, manages the asset and makes the sell decision down the road. You will need to do significant due diligence on the operator, market and the deal. These are long term, illiquid assets that are completely out of your control.
There are benefits and drawbacks to both active and passive investing. I have done both. As an active investor, I was not a good asset manager and none of my properties cash flowed like I projected. I was fortunate that the market was only go up in those days - even for people like me who didn't know what they were doing - so I made a lot of money on the appreciation. When I found syndications, I realized that I was much better suited to this type of investing. The returns met or beat my active returns - I was effectively hiring a professional asset manager to manage the asset for me. It also allowed me to diversify - I didn't have to just be a single or multifamily investor in one or two markets. Instead, I invested in self storage, multifamily, mobile home parks, debt funds, triple net leases, industrial and more - all of these were in different markets with different operators. You can't diversify like this as an active investor.
Real estate is the best investment I have found - I think the key decision that needs to be made prior to deciding Option 1 v Option 2 is are you, your family and your lifestyle more suited to active investing or passive investing? Once you have that figured out, you can take the next step!
Rental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
1y
@Account Closed,
Hey! Here's how I see it:
Option 1: House Hack a Multifamily (under $800K) Live in one unit, rent out the others.
Pros: Generates cash flow locally: Rent from other units can help offset (or cover) your mortgage.
Owner-occupant financing perks: With an FHA or conventional loan, you could put as little as 3.5%–5% down (though you're considering 20%).
Tax advantages: Depreciation, mortgage interest deductions, and potential capital gains exclusions if you live there 2+ years.
Long-term wealth in a strong market: Boston is expensive, but historically appreciates well.
Cons: High prices = tight cash flow: Even with rental income, your margins may be thin.
Landlord responsibilities on-site: Not a passive investment and tenants will be your neighbors.
Family trade-offs: Multifamily properties aren’t always in the most “family-friendly” areas.
Concentration risk: A large portion of your net worth will be tied to one property in one location.
Best if: You want to build equity locally and are okay with active management and sharing your property with tenants.
Option 2: Buy a $550K Primary Residence + Out-of-State Rental Use 20% down on your home (~$110K), and ~$50K on a rental.
Pros:
Better for family life: A condo or SFH can be in a neighborhood that fits your lifestyle.
Geographic diversification: Your rental income isn’t tied to the Boston market.
Potential for stronger cash flow: Out-of-state rentals in the Midwest/South can generate higher ROI and cash-on-cash returns.
More balanced life: You can focus on career and family locally while building wealth remotely.
Cons: Out-of-state learning curve: You’ll need to research markets, build teams, or work with turnkey providers.
Lower equity-building speed locally: You won’t get rental income from your primary residence.
Property management costs: Factor in 8–10% of rents for a good PM.
Best if: You prioritize family lifestyle locally and want a more passive approach to investing.
What You Might Not Be Thinking About: Option 3: Live in a Multifamily Out-of-State If you’re open to moving in a year or two, you could live in a lower-cost market, house hack there, and build faster. Not for everyone, but worth a mention.
Option 4: Rent + Invest Heavily Out-of-State You could delay buying your primary, continue renting, and use most of your $160K to buy 2–3 cash-flowing rentals. Build wealth now, buy your forever home later with passive income helping fund it.
FHA “stacking” strategy: Live in a 2–4 unit with an FHA loan, put just 3.5% down, and use the rest of your cash for reserves + out-of-state deals. Later convert that property into a rental and repeat.
If stability and family lifestyle are most important right now, Option 2 makes a lot of sense—and gives you the best of both worlds. If aggressive wealth building is your goal and you’re willing to live flexibly, Option 1 or even renting longer while investing heavily elsewhere could help you grow faster. Either way, you’re already doing what most don’t - thinking strategically before acting.
Always happy to help more and talk specific markets or run deals side by side. :-)
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
1y
Hello! I'm sorry for your loss.
Best bang for your buck is Option 1 honestly. You reduce your living expenses which is likely your largest bill and also get to add some doors under you with minimal exposure. You can likely quality for 5% down programs so yo ca go upwards of $1mm if you'd but this all depends on your risk tolerance. If Boston metro is important to you the $800k budget might be tough but not impossible. Option 2 allows you to live comfortably but is more of a quality of life decision rather than investment orientated.
Specialist · Georgetown, TX · Member since 2018 · 48 posts · 24 votes
1y
Hello,
Thank you for sharing. It sounds like you and your wife are a relatively young couple starting out with quite a bit of cash. Your head is in the right place and you have great ideas. You have also already received some great advice on this forum.
Since you asked for ideas here is one that comes to mind. Since you are starting out with a good amount of cash - put your money to work for you. You are in a great position to "be the bank" rather than create more work for yourself. You can lend money to people (that you know and trust) who are actively operating in the real estate space or work with companies like Groundfloor or Fundrise to invest in real estate backed notes.Since it is always a good idea to diversify, I like the idea of combining your first option with the strategy I just mentioned. Best of luck to you and your wife.
