Hey everyone! I recently stumbled across bigger pockets podcast and got hooked in. I am 20 years old living in Northern California and would like to start investing in real estate with either SFR or Multi family homes. The market I am in is priced at a premium, and I have a hard time finding something that will work for my situation. Ideally I would like to house hack, but am having a hard time finding something reasonable to purchase so that option is off to the side for now. I have been considering looking out of state to receive some cash flow, but am skeptical about purchasing my first property in a location I don't know as well as my home state.
I would love some advice as I am just getting started and am having a hard time finding any real deals around my area.
Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
7y
@Jevin B. young man imo you should absolutely try to house hack, it's the safest strategy and the easiest first step to take (ie 5% down). Have you met with a MLO yet to see what you need to do in order to qualify, etc? Keep in mind you can house hack a SFH by renting out bedrooms but ideally you can go after a 2-4 unit and live in one of the units. This is absolutely the best way to start imo. If it's too expensive, focus on increasing your income as well as eliminating any/all debt and start stacking those Benjamins until you can pull the trigger on a deal. Be patient, you're a young man with time on your side and the RE market is not going anywhere. In the meantime, Educate yourself: read books, BP forums/articles, listen to the podcast, etc. Educating yourself is the most important step you can take and if you are doing that you are already making progress that will one day yield results.
@Brian Gerlach Thanks for the input. My main concern is my first purchase being out of state. I would ultimately like to purchase a second property in my area that I could then house hack, but not sure if its such a good idea as from the numbers I have been running still put me in the hole monthly. I have no debt with a fair amount saved in the bank earning me a lousy 2% and would like to get that money working harder.
Would you recommend starting out in a local area with a very tight budget? Or starting out of state with more breathing room, but also with the concern of not being a close drive away to address any issues that arise?
And good for you for starting your real estate journey at this point in your life. @Brian G. is right, through education you are already ahead of the curve.
House Hacking is an excellent strategy and we have helped multiple clients achieve that. Multi families are great for that but get snatched up quick. You really want to find your diamond in the rough. Whether that means a basement, loft, storage area, carport which can be converted into an ADU, long driveways, open floorplans, you have to be creative on how you would make a property work for you.
Out of state investing is a great strategy also. The appreciation is not there, so the process is longer but for simple hands off cash flow, it's doable as well.
We also have a meetup next week which I will send you the invite for, or you can search under the Network - Events tabs.