$160K in Cash, No House — What Should I Do Next?

Question

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.

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!

Drew Sygit · Answer

Buy a 2-4 family and live in one unit, rent out the rest.

To increase your cashflow, you could experiment with MTR or STR in one of the other units.

If the experiment goes well, convert more units to that type of rental.

Bryce Jamison · Answer

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.

Emily Valenzuela · Answer

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.

Lien Vuong · Answer

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.

Warren Lizo · Answer

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.

Bernice Retzloff · Answer

Hi @Myoungsu Son!

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!

Wale Lawal · Answer

@Myoungsu Son

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.

Daniel McDonald · Answer

@Myoungsu Son 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.

Cheng Bin Zhang · Answer

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.

Cheng

Melissa Justice · Answer

@Myoungsu Son,

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 RentalUse 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-StateIf 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-StateYou 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. :-)

Best of luck,

Melissa

$160K in Cash, No House — What Should I Do Next?

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