Starting out with $250K. What would you do?
Hi folks,
Nice to meet you all. I am a newbie investor and looking to begin kickstart journey. I'd like to your feedback on two options I'm considering. I've read many discussion on this forum, but nothing really comes close to your own experience.
I have access to $250k (tied to my stock portfolio) that I would like to invest in real estate. I've read several books on REI thus far but realize that the great minds on this forum can also provide significant and relevant insight on strategies they'd apply in current market conditions if they could start over with $250k in cash.
For context, my family and I reside out-of-country, at the moment, but will likely return to the US in 1-2 years. Nevertheless, our first few moves will be executed while abroad. My wife and I have 3 kids, so house hacking wouldn't be an option for us.
The options we had in mind are as follows:
1. BRRRR: All-cash purchase and rehab of a SFH or small multi-family up to $250k. Wait for first few fed rate cuts and refinance to purchase the next property, and onwards. It could make sense to take advantage of minimal competition and relatively "low" home prices while interest rates are still high.
2. Buy and hold a turnkey SFH with 20-25% down. Get our feet wet and gain some experience in this space and, in 6 months to one year, either purchase another SFH with a mortgage or go for an all-cash purchase and start BRRRRing. My fear is that acquiring a of couple properties with a mortgage and then BRRRR later will likely put us in a position where we won't have as much cash left for an "all-cash" purchase and then BRRRR.
A few other points for context:
1. We have excellent credit and can quite easily qualify for a mortgage.
2. We do not own a single property and have zero debt.
3. We have aggressive goals as they pertain to real estate investing, and plan to be fully dependent on it in 5-10 years to replace our W2s (currently at $300k).
4. We're open to other strategies i.e. short and medium term rentals.
What would you do if you were in our position? :)