What Would You Do Between These Two Options?

Question

Hello everyone! I'd really appreciate some advice and different perspectives as I think through my first real estate investment!

Current Situation:

• I'm 23, based in Dallas, TX but originally from Cleveland, OH
• I currently have around $30K saved to work with, so keeping acquisition costs low is a priority
• I have roommates already interested in living with me who would cover roughly 50% of PITI from day one
• I've been studying the co-living and Section 8 strategies and am leaning towards the house hack route but want to make sure I'm thinking about this the right way

Option 1 — DFW House Hack + Co-Living (Leaning This Way):

• Buy a 3/2 or 4 bedroom SFH in Richardson/Plano using an FHA loan and house hack year one
• After year one, convert into a co-living setup renting by the room (potentially 6-7 bedrooms)
• Richardson feels like the sweet spot — more affordable than Plano/Frisco with similar rental demand

Option 2 — Cleveland Duplex + Section 8:

• Invest out of state in Cleveland where prices are significantly more affordable
• Buy a duplex and leverage Section 8 for guaranteed rent and higher potential cash flow
• Downside — I'd be an out of state landlord dealing with tenant headaches from a distance

What I'm Looking For Advice On:

• Is the FHA → house hack → co-living conversion a solid first move in DFW?
• Is Cleveland Section 8 actually worth the headache as an out of state investor?
• Which strategy would you prioritize at 23 with a long term wealth building mindset?

Would love to hear from anyone who has done either strategy!

Thank you in advance!

Nicholas L. · Answer

@Geetansh Sankhla

buying a random duplex in Cleveland at a price point below the median will cash flow - except it will be your cash flowing into the property.

house hacking is a much better way to get started.

if you want to invest in Cleveland that's great - but it's going to take more than browsing online.

this is what tends to happen...

Turnkey Nightmare: Property Manager Ignored My Warning About a Missing A/C…

Nightmare with my property manager - advice needed!

Feedback Needed: $8.8k Turnover Quote for 2BR Duplex (Half)Out-of-State Landlord Nightmare: 4 Months No Rent, Cleveland Escrow BattleFailed BRR in Memphis TN

A Cautionary Tale About a Property Manager in Cinncinatti

https://www.biggerpockets.com/forums/48/topics/1242392-rough...

https://www.biggerpockets.com/forums/48/topics/1137397-balti...

https://www.biggerpockets.com/forums/432/topics/1231840-sell...

https://www.biggerpockets.com/forums/311/topics/840134-memph...

https://www.biggerpockets.com/forums/963/topics/1195280-expe...

Aaron Zimmerman · Answer

House hack. I believe Dallas is a stronger market plus you're likely going to buy a bigger asset and get the benefits of leverage. Plus reducing housing expense.

Alan F. · Answer

No shade on Ohio but c'mon, Dallas is a major economic hub. Personally id be where the $ "is".

Jay Hurst · Answer

House hack in DFW over section 8 in Cleveland.  But shelf the idea of added bedrooms in Richardson, Plano, Frisco etc as your neighbors will call code compliance in about 10 minutes after 7 cars pull up in front of the house with boxes.

Bryan Coll · Answer

My thought is that if you aren't already successful in the location that you are close to, trying to investor long distance would be significantly harder. Section 8 has it's own difficulties.

Learn by starting near where you live (or in this case, where you live). Easier to correct/update/renovate/repair/manage if you are closer to the property when you are starting out.

Drew Sygit · Answer

You don't know what you don't know, so why don't you househack and increase your odds of succeeding?

Even if you rent rooms to friends, have them formally apply, screen them and have them sign leases. Explain to them they are helping you learn how to be a landlord, so you can invest remotely.

Diego Alvarado · Answer

Hi @Geetansh Sankhla

At 23 with an stable W-2 that you are planning to stay in for a while, you should focus on appreciation.

Cash flow always looks appealing but you have to understand that it comes with work and a lot of risk. Being out of state that could cause you to hate real estate before you began.

Coliving is growing in DFW and it is getting very popular, with the right mindset you can start building a good business there.

Marc Rice · Answer

You can have a low entry in most of the markets in the midwest. Cleveland give you a solid cash flow but often comes up with deferred maintenance work

Bruce Woodruff · Answer

Are you kidding? Dallas. You get to wear a cowboy hat.....

What Would You Do Between These Two Options?

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