Hello All,

First Post here with BiggerPockets. I'm trying to get together a plan for my investing journey. Is there anyone with experience of starting their investments in high priced area? If so, what was your experience? If given the chance to start over, would you rather take that money and invest out of state?

I'm on the fence about House Hacking in Orange County, CA with an FHA or using my savings to invest out of the area/state using a conventional 20-30% down payment. I know both have pros and cons, the issue right now is financing.

Right now my out of state options would be Arizona or Nevada as I have family in those areas that could possibly help me learn the markets quicker or have a realtor to help.

Any advise is very much appreciated

@Levi Stillman sounds like you have some good options here.  What are the numbers like for a house hack - i.e., how much total cash would you have to spend (down payment, closing costs, etc.) vs. for an out of state rental?  And when you say the issue is financing, what do you mean?

Originally posted by @Nicholas L. :

@Levi Stillman sounds like you have some good options here.  What are the numbers like for a house hack - i.e., how much total cash would you have to spend (down payment, closing costs, etc.) vs. for an out of state rental?  And when you say the issue is financing, what do you mean?

Hi Nicholas, 

Thanks for your reply! If it were a house hack, I would have roughly $40-45k but for a 3.5% DP as this would be a FHA loan that could go a long way. For out of state roughly $25k, for the same expenses. Both would leave me with little to renovate, which worries me more for OOS as I like the plan of BRRRR strategy for out of state.

I guess saying Financing was an issue, was a misrepresentation of what I meant. It's more so a question on what I do with my finances for the best result. 

You asking these questions and me typing it out seems to have maybe answered my own question so I appreciate that. If you have any recommendations, I'd still love to hear as I am still learning as much as I can

Thank you!

The money could go further in OOS investing but it all depends on the deal you get back in your own market. It seems like you weighed the pros and cons already so I would just have some conversations with people who were in your situations as well as with those who invest out of state and are familiar with the markets you are looking into. @Levi Stillman

@Levi Stillman I invest in Boston, MA where the prices are really high. I really like it, but it certainly is one's choice. For me, I have local control over my properties - and with 3 properties, my portfolio value is well over $2.7M. 

I have house hacked them, which allows me to get in with low down payment. In my opinion, the low cost properties can become a challenge with maintenance costs, etc. and before you know it, what you thought would be cash flow is not.

Again, I don't think there is a "right" answer - but I do believe you can make either work!