What would you do? Money stay or money go

[Dillon Brooks]

I have 100k and live in SoCal. I am in between building an additional unit on my duplex property. This would generate 2k a month which would have me living for free and generating 1k in income a month with current numbers. It would also cash flow 3k once I move out the front.   Or should invest outside of California, do to the extremes regulations they continue to pass in the state and the city. My return may be higher here in this move but the state has me thinking otherwise.

[Joe Villeneuve]

If you have $100k, and plan on adding rental space, how much actual CF would you be getting per month from that added space?  

You mentioned $1k and $3k as projected income.  Do you mean cash flow or rent?  Rent means nothing.  The only thing that matters is what you keep...the CF,...so what would the ADDED CF (not rent) be after you built this addition?  If that $1k would be added CF, you would be getting only $12k/year...at a cost of $100k.  That means it would take you over 8 years to recover your costs (that's when you start profit),...which is terrible.  I find it very hard to believe that you couldn't find more than one property where you could take that $100k in cash, use it as 20% DP (meaning $500k in PV), and get CF better than $1000/month.  You should be getting at least $1750-2000/month in CF with that CP.  $2k/month ($24k/yr) would get you a recovery of your cost in a little over 4 years.  Much, MUCH, better.