Starting with $35K - In State or Out-of-State?

Question

Hi everyone, I’m new to real estate investing and just graduated with a Construction Management degree. I have about $35K for a down payment and am pre-qualified for $310K for SFH and $400K on a multifamily property.

Here’s where I’m at and what I’m considering:

• Interested in investing locally in Anchorage, but the market is tough.
• Thinking about buying a duplex to fix up one side while renting the other, but multifamily locations aren’t always ideal here.
• Also considering buying a single-family home with good bones or a foreclosure and doing cosmetic or renovation work, possibly using a renovation loan.
• Exploring out-of-state rentals in Indianapolis, Cleveland, or Birmingham for better cash flow opportunities.
• With my construction background, I’m open to eventually doing flips as well.

Interested in investing locally in Anchorage, but the market is tough.

Thinking about buying a duplex to fix up one side while renting the other, but multifamily locations aren’t always ideal here.

Also considering buying a single-family home with good bones or a foreclosure and doing cosmetic or renovation work, possibly using a renovation loan.

Exploring out-of-state rentals in Indianapolis, Cleveland, or Birmingham for better cash flow opportunities.

With my construction background, I’m open to eventually doing flips as well.

Given all this, what would you recommend as the best path?

• Focus locally on SFH or duplex?
• Start with out-of-state rentals?
• Pursue flips leveraging my construction skills?
• Use renovation loans or foreclosure strategies?

Focus locally on SFH or duplex?

Start with out-of-state rentals?

Pursue flips leveraging my construction skills?

Use renovation loans or foreclosure strategies?

Any advice or experiences would be appreciated!

Patrick Drury · Answer

@Patrick CunninghamKeep in mind if you are not going to house hack the multi-family, you are going to have to put down 25% for a conventional loan. I say that because it will decrease your budget. If you plan on putting down 35k, on a 400k 2-4 unit, that would be out of the question if it's out of state. Unless you can put down more

Arman Ahmed · Answer

@Patrick Cunningham

Hey Patrick — congrats on graduating and jumping into real estate! With your construction background and $35K to start, you’re in a solid position to take on value-add opportunities.

I invest in Ohio, mainly in markets like Cleveland, where price-to-rent ratios are strong and there’s steady demand for both single-family and small multifamily rentals. Cleveland especially has pockets like Old Brooklyn, West Park, and parts of the west side where cosmetic rehabs and BRRRRs are still very doable under $150K–$200K. It could be a good fit if you’re open to out-of-state investing with strong cash flow potential.

That said, there’s no one-size-fits-all — you just want to match your time, risk tolerance, and goals with the right market. If Anchorage deals are tight and you’re comfortable building a team remotely, out-of-state might give you a head start.

Keep us posted on what you decide — excited to see how you grow!

Chris S. · Answer

Hey Patrick,

I would recommend you look for a fourplex somewhere in UMED, South Anchorage, West Anchorage, or Eagle River. Preferably something townhouse style as they rent much easier. These are harder to find, so you will need a good agent and preferably a pocket listing.

I don't know your income, but you should be able to buy a pretty decent fourplex since you can take all of the rents (of 3 units at least) and use 70% of them towards your income. Your 35k should cover the cost of the down payment and reserves with an FHA loan, depending on the cost of course.

If you want to go the hard route buy in one of the less desireable areas, you know where they are. These areas are harder to rent out, but have great cap rates and can be very profitable with a little sweat equity. There are pockets in these areas that aren't bad areas. It depends a lot on the street and properties around you.

I got started on one of those areas and still own a few fourplexes in there which cash flow and I rarely have any issues with now. It was definitely more difficult than our Eagle River fourplex which we bought and forgot about for a few years. But, both are profitable in their own way.

When I first started I was broke as hell and had to start in the lower income areas. It was great for me at that time, and I will never regret it since it got me to where I am now. But, it was definitely not the easiest place I could have started.

Feel free to reach out if you have any questions. I don't mind helping out where I can. Just please don't send me a list of 10 properties and ask me which one is best. Narrow it down to 2-3 and I can help advise. I would recommend a good investor realtor though.

Lindsay Davis · Answer

@Patrick Cunningham,

$35,000 is definitely going to be tough to work with in Anchorage, especially considering the fact that you’ll probably need to come up with some extra cash beyond the down payment for carrying cost reserves and cosmetic repairs.

You mentioned Birmingham as a market you’re considering. I’m based in the city and can say that a down payment for a single-family home, plus reserves for repairs and carrying costs, is definitely within reach at $35,000.

As for your other questions:

1. Single-family or duplex? Either is fine, but at your budget, a SFH may be more attainable. You can always sell and reinvest in a duplex later, or use the cash flow from your first SFH to cover a duplex purchase in the future.

2. Pursue flips leveraging my construction skills? This would be interesting given your background, but it’ll be very tough to do flips out-of-state if you’re not there personally. One option, though, would be to temporarily relocate to the market during the rehab period. Another would be to invest in something more passive, like a turkey rental.

3. Use renovation loans or foreclosure strategies? You could consider seeking financing through the FHA’s 203(k) program or through private lenders if you don’t have the money to fund your rehab out-of-pocket. But I’d offer the same word of caution here: attempting this remotely when your project is in an out-of-state market (and with debt hanging over your head) is going to be an uphill battle. As for foreclosures, I’d stay away. You’ll often have to come up with the full amount of the winning bid at close, and even then, you may not be getting much of a discount at all.

Lauren Robins · Answer

Given your situation, starting locally with a duplex is likely your best move. House hacking allows you to live in one unit, rent the other to offset your mortgage, and apply your construction skills to add value through renovations. While out-of-state markets (such as Indianapolis, Cleveland, or Birmingham) could potentially offer better cash flow, it's good to keep in mind that managing properties from afar is more complex. Flipping is also a viable long-term strategy but it carries more risk and I'd recommend that you hold off on that until you have a bit more capital and local real estate experience.

Starting with $35K - In State or Out-of-State?

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