Seeking Wisdom: What Would You Do on Your First Deal?

[Chris Hernandez]

Hey BP Fam! I’m preparing to make my first real estate investment and would appreciate your insights. Here’s my situation: I have $100,000 available for my first deal(s) and currently earn $80,000 per year from my W-2 job.   Option A: House Hack Locally (Sacramento, CA Region)   • Purchase a 3-4 bedroom home for $400,000–$500,000. • Local rents average about $800 per bedroom. • A 15–20% down payment is required, which would use up most of my capital and limit my ability to pursue additional investments in the near term.     Option B: Out-of-State Rental(s)   • Invest in markets where homes cost $200,000–$250,000, with rent-to-price ratios of 0.5% or higher. • This approach could allow me to diversify, potentially acquire multiple properties, and maintain some liquidity for future deals.   This has been a dream of mine for some time now and I feel like I am finally in a position to make the move. If anyone has alternative strategies or perspectives-such as creative financing, or leveraging different real estate investment models like BRRRR or syndications-I’d love to hear your thoughts. Thank you!

[Scott Scoville]

Quote from @Chris Hernandez:

Hey BP Fam! I’m preparing to make my first real estate investment and would appreciate your insights. Here’s my situation: I have $100,000 available for my first deal(s) and currently earn $80,000 per year from my W-2 job.   Option A: House Hack Locally (Sacramento, CA Region)   • Purchase a 3-4 bedroom home for $400,000–$500,000. • Local rents average about $800 per bedroom. • A 15–20% down payment is required, which would use up most of my capital and limit my ability to pursue additional investments in the near term.     Option B: Out-of-State Rental(s)   • Invest in markets where homes cost $200,000–$250,000, with rent-to-price ratios of 0.5% or higher. • This approach could allow me to diversify, potentially acquire multiple properties, and maintain some liquidity for future deals.   This has been a dream of mine for some time now and I feel like I am finally in a position to make the move. If anyone has alternative strategies or perspectives-such as creative financing, or leveraging different real estate investment models like BRRRR or syndications-I’d love to hear your thoughts. Thank you!

Hey Chris, depends on your goals, but the safer play is a house hack where you live. I've helped a few investors in the last month purchase a house hack, one buying a duplex and renting out the other side, and another buying a single family and renting out the rooms. Location is key, plus if you're planning on living there, a good neighborhood is probably important to you. Be happy to chat more about house hacks and Sacramento anytime. By the way, I'm currently involved in a few flips in Sacramento, if you're ever interested in checking it out.