In State or Out of State
Help me with a dilemma BP...
I live in Oakland California where the market is the highest its ever been and I want to get started in REI. I have come up with 2 options and need some advice as to which one is smarter.
Option 1: Buy a single family home in Vallejo CA (about 30 minutes away, close to Napa) for around 270K. Rehab a little and rent it out. Rents are going for 1600-2100. The market there is hot and it looks like it should appreciate very very well. I know the market well here and most importantly I know what people are looking for, me being one of them.
Option 2: Buy a single family or multi unit home in Cleveland for around 80K. Rehab a little and rent out. Rents are typically 1000 for SFR's and 700-900 per unit in MFR's. I have some boots on the ground there that know the area well, neighborhood to neighborhood. Lesser appreciation probably, but a lower price to get in. Maybe buy up a couple of these over the next few years.
Both options cash flow enough but one has more appreciation potential in a market I know. The other is out of state, cash flows maybe a little more with less appreciation but has a lower "get in" price.
Thoughts??
Thanks!