Hey guys!  I've just paid off my student loans and - after dumping about a year on travel - I've finally saved up enough to start considering investing in real estate.  I'm currently renting a room out of a single-family-home that has four rooms with the homeowner living in the unfinished basement; I'd like to do something similar to maximize cash flow (sacrifice comfort in the name of earnings).  I'm struggling to decide where I should invest, how much I should invest, and what I should invest in.  I'd like to learn what you folks would do (and why) if you were in my situation.

My finances: 

 - 30K available for a down payment

 - no debt

 - excellent credit, income, employment (software engineer)

My goals:

 - Take advantage of my solid credit and employment to finance an investment property that I can use to generate cash flow and (maybe) live rent-free.

My preferences:

 - A 1 or 2-car garage attached to the house

- No HOA

 - Warm weather year-round

My questions:

1. - Where would you shop and why? I love CA (Long Beach, San Diego) but from what I understand, the investment value is much lower in that region than in locations like Dallas, Tampa, or Orlando (lower CAP, job growth, population growth, higher entry costs). I'd prioritize earning potential over weather.
2.  - With 30k at a 3.5-5% down payment, I can finance a ~$600k property.  I've seen guidance that suggests starting small, but I'm attracted to the idea of maximizing my cash flow as soon as possible so it can more quickly snowball into real wealth.  Is this an unwise position?
3. - What would you invest in and why? I like the idea of replicating what my current landlord has - a SFH with 4+ rooms and then renting rooms through a combination of short-term and long-term.

Thank you for reading!

Do you invest in rare coins, comics, baseball cards, or vintage art work?  I don't because I don't know anything about them or their value. I invest in areas that I know well. Knowing reduces my risk to almost zero.

If you just pick a real estate market and buy a property in hopes of getting rich, you will learn a costly lesson. Buy what you know.

Secondly, you have $30K and that is great. You will not get rich with $30K. What is the best case scenario? Double, Triple, or Quadruple your money? Can you afford to lose it all? Continue to save your money, learn your market intimately, and invest when you find a deal that cash flows well.

@M Ben, welcome to BP! You're in the right place. You're in the stage of determining your market, and you have several decisions to wrestle with. Do you buy an actual investment property to rent out to tenants (at a much higher down payment) or do you use cheaper primary residence financing to house hack a duplex/triplex/quad? Determine your goals and your market and go from there. 

@Andrew A. thank you - that's what I'm trying.  It looks like maybe some parts of my original post aren't showing up.

> I'm currently renting a room out of a single-family-home that has four rooms with the homeowner living in the unfinished basement; I'd like to do something similar to maximize cash flow (sacrifice comfort in the name of earnings).

>  Take advantage of my solid credit and employment to finance an investment property that I can use to generate cash flow and (maybe) live rent-free.

Those are my goals, though I've asked a few questions about how to go about defining the type and location of property I should be considering (or at least how to start thinking about it).  I'd like to know what you would do and why if possible.

You need 20-25% down for a investment property, unless, you also intend to live in it. With 30k I'd put it in my savings, the last thing I'd do is dump all my money into something that at best gets me a few hundred a mo and at worst bankrupts me. 

REI is risky and bit of bad luck/poor planing can cost you quite a bit... so a healthy savings account can't be overlooked IMO. Trying to build up reserves at a few hundred a month doesn't leave much room for error.

@Matt K. Yes, I intend to live there and rent out rooms.  Thanks for the perspective.

SoCal is a hot market right now and extremely expensive.... and CoL is outrageous in CA.

Hey @M Ben 

Will your job allow you to relocate?

If not, house hack like your current landlord right in Falls Church. It'll give you great experience as a landlord. I'm house hacking my primary residence now and enjoying every aspect of it. Just thoroughly vet any potential renters before allowing them to sign the lease. (I required two in person meet ups prior to making a decision. Usually over coffee or a beer. I also made it a requirement to meet any partners/significant others that, unless you don't allow it, will be coming around the house too). 

Food for thought. Good luck!

I'd invest in Augusta, GA in SFH. Third highest yield in the nation with great economic growth.

I'd pay cash for one house, finance it, go buy another one. Pay off debt on first one from cashflow with first and second property (and income). 

You can snowball this quite quickly depending on your income. 

@M Ben

Thank you very much @Kenneth Mooney .  

I can back @Kenneth Mooney up on this one.. Augusta is a great place to invest. Im just about getting into the investment game with around the same amount to start with and Augusta is on my radar. It's solid!

@Darrell Noe when you get ready lets connect. Would love to meet you if you ever head down this way. 

Augusta sounds good to me to,I would like to hear some more about it.
If you have any more info.please let me know.

Thanks

@Kenneth Mooney Do you know if it's possible to refinance a fixer-upper (first property) in GA before the 6-12 month mark using a credit union?

@M Ben why specifically a credit union? I use a bank that only requires a tenant to be in place. So yes, you can....from the right bank.