First post and ready to buy! What do you think of my strategy?

[Paul Tan]

Finally got my headshot uploaded so I no longer have to lurk around the forums! XD

What are your thoughts on Starting Small (Cashflow) vs Going Big (Equity)?

Since I will invest in the Augusta, GA, I'm trying to figure out what strategy to take for the next 3-5 years. Here's the facts:
- I'm pre-approved for $330K but I can push it to $450K if I really need
- $10K-$20K Saved for down payment. $10K Saved for renovations
- Saving $800-$1400 every month
- I have access to the VA loan

(*preferred) Strategy #1: $100K-$200K purchase. ~$1000 Mortgage. Rent for ~$1000. Rinse/repeat once I can ReFi for 75% ARV. 1031 in 5 years.
Strategy #2: Buy a SFH in a subdivision for $300K+, waiting until I have enough cash/equity and buy again. HODL.

Here are my pros and cons for each:

### $100K-200K ### <-- More Active Investment
Pros
- Higher Price to Rent Ratio
- Fast turnaround to purchasing next property (6 month before ReFi)
- Value Add repairs can improve house value a lot
- 3-4+ purchases in 5 years = More Learning Opportunities/Networking

Cons
- Higher Risk of Bad Tenant
- Maintenance Repairs
- Lemon Purchases

### $300K+ ### <-- More Passive Investment
Pros
- More equity to draw from down the road
- Good Neighborhood
- Family Tenants are safer

Cons
- Higher Operational expenses (Taxes, Insurance)
- HOA Limitations
- Typically recent builds/renovations so not much room for Rehab
- 1-2 purchases in 5 years = Fewer Learning Opportunities

I know that there is no one solution. Also, specific advice depends on me providing more details. But I always like to hear more new perspectives! So hit me with everything you've got!

[Kyle Spearin]

@Paul Tan thank you for your service! Everyone has given awesome advice. 

It makes sense to leverage the VA loan and then other low downpayment options to get started. I assume you'll live there and house hack? I tend to agree with the people preaching equity early on, especially if it's your primary residence.

If you choose to go the cash flow route, explore DSCR loans that are based on a property's performance rather than your DTI. You'll be able to scale quicker (if that's your intention).

[Alex Briones]

Quote from @Richard Capers Jr:

Quote from @Paul Tan:

Finally got my headshot uploaded so I no longer have to lurk around the forums! XD

What are your thoughts on Starting Small (Cashflow) vs Going Big (Equity)?

Since I will invest in the Augusta, GA, I'm trying to figure out what strategy to take for the next 3-5 years. Here's the facts:
- I'm pre-approved for $330K but I can push it to $450K if I really need
- $10K-$20K Saved for down payment. $10K Saved for renovations
- Saving $800-$1400 every month
- I have access to the VA loan

(*preferred) Strategy #1: $100K-$200K purchase. ~$1000 Mortgage. Rent for ~$1000. Rinse/repeat once I can ReFi for 75% ARV. 1031 in 5 years.
Strategy #2: Buy a SFH in a subdivision for $300K+, waiting until I have enough cash/equity and buy again. HODL.

Here are my pros and cons for each:

### $100K-200K ### <-- More Active Investment
Pros
- Higher Price to Rent Ratio
- Fast turnaround to purchasing next property (6 month before ReFi)
- Value Add repairs can improve house value a lot
- 3-4+ purchases in 5 years = More Learning Opportunities/Networking

Cons
- Higher Risk of Bad Tenant
- Maintenance Repairs
- Lemon Purchases

### $300K+ ### <-- More Passive Investment
Pros
- More equity to draw from down the road
- Good Neighborhood
- Family Tenants are safer

Cons
- Higher Operational expenses (Taxes, Insurance)
- HOA Limitations
- Typically recent builds/renovations so not much room for Rehab
- 1-2 purchases in 5 years = Fewer Learning Opportunities

I know that there is no one solution. Also, specific advice depends on me providing more details. But I always like to hear more new perspectives! So hit me with everything you've got!

I'm in the Augusta market as well. Why don't you put nothing down with your VA loan? Then in a year or so use the loan again for another purchase? There's a potential to use the maximum eligibility with these 2 purchases but you can House Hack them and increase the cash flow vs market rates in the area.

Save your cashflow and your down payment money then with the 3rd purchase go for a FHA loan 3.5% down with the amount you made. Move every 12-18 months until you are tired of doing it.

All these folks are very savvy in their analysis and recommendations. All of you guys are a gold mine. 

Having said that, if I were you, I would stick to Richard Caper's and Erin Chuch's advice. They are spot on.

You have the resources in place, now you just need to decide!

Start with the end goal in mind, take action, and follow your strategy. 

[Aashish Kaushik]

Quote from @Jason Allen:

I would invest in the Columbus, Ohio. I just walked a turnkey property that beats the 1% here in town. This property should collect at least 1800 - 2100 a month in rent. There are plenty of opportunities like this in Columbus currently, both on and off the market. With $150k, you could easily pick up 2 or 3 cash flowing properties. 

 Do you have any good zipcodes in Columbis that i should look out for

[Aashish Kaushik]

Quote from @Aashish Kaushik:

Quote from @Jason Allen:

I would invest in the Columbus, Ohio. I just walked a turnkey property that beats the 1% here in town. This property should collect at least 1800 - 2100 a month in rent. There are plenty of opportunities like this in Columbus currently, both on and off the market. With $150k, you could easily pick up 2 or 3 cash flowing properties. 

 Do you have any good zipcodes in Columbis that i should look out for

 Columbus*

[Remington Lyman]

Quote from @Aashish Kaushik:

Quote from @Aashish Kaushik:

Quote from @Jason Allen:

I would invest in the Columbus, Ohio. I just walked a turnkey property that beats the 1% here in town. This property should collect at least 1800 - 2100 a month in rent. There are plenty of opportunities like this in Columbus currently, both on and off the market. With $150k, you could easily pick up 2 or 3 cash flowing properties. 

 Do you have any good zipcodes in Columbis that i should look out for

 Columbus*

 I can send you some zip codes in Columbus, Ohio

[Gabriel Zurita Pertinez]

Since you are a veteran, why don't you consider a VA loan and put 0% down? Also if you can house hack and make some improvements to the house you can buy some equity and eventually refi and get some money to buy your next.

[Derek Delgado]

Hey Paul, 

Good luck with your first purchase.

[Ashton Hines]

Another angle to consider is to ask what will be easier to rent out long term. Who will your buyers and tenant be at each price point. If the cheaper route only gets you a place that has quirks and is hard to market that will bite you long term. If the $300K lets you get in to a decent area and is the average home of the area (maybe 3/2 1500sqft or whatever) then when you go to sell or rent you will have no problem. Plus stretching a little to get a larger base to build equity will pay off I think. Just my two cents. 

[David Lutz]

My first purchase has been my biggest headache, because I was looking for better cashflow and got all the issues you expect.  I'd also point out that there are a lot of fixed costs associated with maintenance and CapX.   It costs the same to have a plumber snake a drain regardless of the value of the house. But it takes up a much larger percentage of the rent if you're only pulling in $1000 per month.

I just put up a massive post on all my costs and headaches for 5 properties over the last 3 years, if you're interested.
https://www.biggerpockets.com/forums/12/topics/1171104-the-m...

The advice you're getting on how to use your loan all sounds good to me. I'd double down on buying a property that's going to attract desirable tenants. The paper savings on "cashflow" properties evaporate in reality.

BTW, two of my properties are in Augusta, feel free to PM me if you want to chat about the market.

[Katie Saleeba]

First post, ready to buy my first fix and flip. Is anyone gracious enough to give me some tips on where to start. I called a few wholesaling agencies and asked to be out on their distribution list.... 

[Mike Terry]

Quote from @Paul Tan:

Finally got my headshot uploaded so I no longer have to lurk around the forums! XD

What are your thoughts on Starting Small (Cashflow) vs Going Big (Equity)?

Since I will invest in the Augusta, GA, I'm trying to figure out what strategy to take for the next 3-5 years. Here's the facts:
- I'm pre-approved for $330K but I can push it to $450K if I really need
- $10K-$20K Saved for down payment. $10K Saved for renovations
- Saving $800-$1400 every month
- I have access to the VA loan

(*preferred) Strategy #1: $100K-$200K purchase. ~$1000 Mortgage. Rent for ~$1000. Rinse/repeat once I can ReFi for 75% ARV. 1031 in 5 years.
Strategy #2: Buy a SFH in a subdivision for $300K+, waiting until I have enough cash/equity and buy again. HODL.

Here are my pros and cons for each:

### $100K-200K ### <-- More Active Investment
Pros
- Higher Price to Rent Ratio
- Fast turnaround to purchasing next property (6 month before ReFi)
- Value Add repairs can improve house value a lot
- 3-4+ purchases in 5 years = More Learning Opportunities/Networking

Cons
- Higher Risk of Bad Tenant
- Maintenance Repairs
- Lemon Purchases

### $300K+ ### <-- More Passive Investment
Pros
- More equity to draw from down the road
- Good Neighborhood
- Family Tenants are safer

Cons
- Higher Operational expenses (Taxes, Insurance)
- HOA Limitations
- Typically recent builds/renovations so not much room for Rehab
- 1-2 purchases in 5 years = Fewer Learning Opportunities

I know that there is no one solution. Also, specific advice depends on me providing more details. But I always like to hear more new perspectives! So hit me with everything you've got!

 I have two thoughts when starting out.  From the movie the Patriot "Aim Small Miss Small".  Both startegies will most likely work.  I presume you are young with a lot of years ahead of you. Time will heal most real estate mistakes.  That being said I would cut your teeth on small manageble deals.  You will make mistakes and you won't truly understand some of the theory shared here until you actually live it.  So why gain experience with maximum risk.  For young people the live in flip and house hacking are the least risky direct investments you can undertake that I am aware of. Look there.  Good luck.