House hack in California or out-of state
Member since 2020 · 4 posts · 0 votes
Hello,
I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.
I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.
Advice?
Hello,
I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.
I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.
Advice?
Reyna,
Wow, I've never seen somebody ask if they should househack in CA or move out of CA to househack elsewhere. Usually it's a choice between househacking here or living here and investing out-of-state.
I'm a big proponent of househacking in California because we experience really powerful appreciation here. Househacking here isn't an income play; it's a wealth-building play. By lowering your cost of living, improving a property that needs some work, and having your tenant(s) pay down the principal of your loan, your net worth will really climb while you're househacking. The same principle will apply anywhere, but with less appreciation in, say, the Midwest, you'll be losing out on some of the sweet CA equity growth.
I gotta say, choosing where to live is more than just an investment decision. If you want to stay in Oxnard, you should really look into low-down-payment loan programs, especially the NACA program (naca.com) and find a way to make a househack here work. But if you're at a point in your life where you want something new, if you're itching to get out of CA and start a new chapter, then definitely get going! There are plenty of markets that you'll do well in -- it's just a question of where you want to live.
Good luck!
Best,
Jon
@Reyna Montoya It really depends on your situation. Do you currently have a decent to well paying job? My wife and I live in the Seattle area and its just too expensive for us up here to take advantage of house hacking (not that we couldn't figure out how to be profitable, we just don't qualify for anything around us). We have started taking advantage of the BRRRR strategy out of state while renting our own place here. Our income goes a lot further in other states and we found a cheap place to rent in comparison to what we'd be paying on a mortgage.
We're also tied down by my wife's job and the fact that we have kids. If you're still young, not bound by a job or other responsibilities, then I would suggest you listen to episode 392 of the Bigger Pockets podcast. Great episode on the potential of house hacking and renting room by room. You'd just want to make sure to research the heck out of your market whether you decided to stay local or move.
Hello,
I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.
I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.
Advice?
Reyna,
Wow, I've never seen somebody ask if they should househack in CA or move out of CA to househack elsewhere. Usually it's a choice between househacking here or living here and investing out-of-state.
I'm a big proponent of househacking in California because we experience really powerful appreciation here. Househacking here isn't an income play; it's a wealth-building play. By lowering your cost of living, improving a property that needs some work, and having your tenant(s) pay down the principal of your loan, your net worth will really climb while you're househacking. The same principle will apply anywhere, but with less appreciation in, say, the Midwest, you'll be losing out on some of the sweet CA equity growth.
I gotta say, choosing where to live is more than just an investment decision. If you want to stay in Oxnard, you should really look into low-down-payment loan programs, especially the NACA program (naca.com) and find a way to make a househack here work. But if you're at a point in your life where you want something new, if you're itching to get out of CA and start a new chapter, then definitely get going! There are plenty of markets that you'll do well in -- it's just a question of where you want to live.
Good luck!
Best,
Jon
Hello,
I am a newbie to REI. I am located in Oxnard, CA and am currently Debating whether to invest in the states (not necessarily Ventura court) or outside the states for our first house hack.
I understand that the first house hack might not be the easiest, but it will definitely help me for the second or third investment. Definitely considering moving if it’s more beneficial for our strategy to house hack.
Advice?
Reyna, what's the update? Are you staying in CA or moving out? Dying to know!
@Christopher Parsons Thank you for responding to my question. I am doing all of this with my partner. I make a decent amount of income while he gets paid well and the most between us. We are in a similar situation in the lines of being able to relocate. We have no issues taking risks and finding a place out of state but our knowledge is still to new to know where to begin our search for out of state properties. I listened to episode 392 and let me say "WOW!" it's amazing how many strategies to cash flow. I'm understanding how it all depends on how you go about the strategy. I've listen to Podcast where they say "do research in your market?" But, what does that really mean? like; pricing? class? developing cities? increasing housing areas?
@Jon Schwartz thank you for responding my question as well. As a newbie I'm eager to find the "holy grail" but as I keep listening to podcast and reading books, asking questions I realize what you said is very accurate. I need to make it a cashflow any where I go. So what we decided is staying in CA, but invest central CA. I joined a mastermind group to further my commitment and start analyzing leads. I just had to take, what I considered my first step and that's deciding whether CA is my starting point. I thought it wouldn't hurt to get others input.
Thank you again@Jon Schwartz and @Christopher Parsons
@Reyna Montoya researching your target market means try to get to know everything you can about that area. Is the population growing, are big chains starting to move in if they're not already there, are jobs dependant on a specific employer or is there decent diversity (ex: we have tech and Boeing up here, but tech is starting to move to working from home and Boeing is starting to move some production out of state), whats the median income, where are the bad neighborhoods, etc. For us, we got lucky and an old friend of mine got into wholesaling about 3 years ago and has been killing it down in Texas. He grew up in that area and moved back there about 5 years ago, so he knows the ends and outs of the smaller towns we're investing in there. Main thing is, if you can't fly there and get the knowledge yourself, find and put together a decent team that knows that area really well. Property managers are essential for that seeing as they will (or should) tell you where they don't want to be doing business. They'll also help you get your investment on par with comps in the area. They won't make money unless you make money, so there is incentive for them to help you best they can. Thats not to say some might be desperate for business, but thats where it becomes your job to interview them (over the phone should be fine).
@Christopher Parsons Thank you for responding to my question. I am doing all of this with my partner. I make a decent amount of income while he gets paid well and the most between us. We are in a similar situation in the lines of being able to relocate. We have no issues taking risks and finding a place out of state but our knowledge is still to new to know where to begin our search for out of state properties. I listened to episode 392 and let me say "WOW!" it's amazing how many strategies to cash flow. I'm understanding how it all depends on how you go about the strategy. I've listen to Podcast where they say "do research in your market?" But, what does that really mean? like; pricing? class? developing cities? increasing housing areas?
@Jon Schwartz thank you for responding my question as well. As a newbie I'm eager to find the "holy grail" but as I keep listening to podcast and reading books, asking questions I realize what you said is very accurate. I need to make it a cashflow any where I go. So what we decided is staying in CA, but invest central CA. I joined a mastermind group to further my commitment and start analyzing leads. I just had to take, what I considered my first step and that's deciding whether CA is my starting point. I thought it wouldn't hurt to get others input.
Thank you again@Jon Schwartz and @Christopher Parsons
Sounds cool!
Where in central CA are you considering? I'm curious about the area.
And which mastermind? I'm also very interested in CA masterminds.
Best,
Jon