Ground Up Build or BRRRR For 1st Investment?

[Amanda Cadena]

Just starting out in real estate. Biggest issue I have is lack of funding. I have two directions I could go and would love guidance and opinions from more experienced investors. 

Option 1: Make connections with other investors for funding and BRRRR our first investment property, then build our portfolio.

Option 2: My mom has a property in Walnut, CA that is free and clear. She is willing to let us build on the property since it is not being used anyway. We were thinking to build a house on the land, put a renter in it, and pull out the equity to then BRRRR properties. The location of the property is among million dollar homes, so we are confident that the property will have enough equity for funding our first deal, while simultaneously acting as a SFH rental.

Would love to hear the realistic outcome from experienced investors. Which of the above is the smarter choice?

Thank you in advance!

[James Wise]

Originally posted by @Amanda Cadena:

Just starting out in real estate. Biggest issue I have is lack of funding. I have two directions I could go and would love guidance and opinions from more experienced investors. 

Option 1: Make connections with other investors for funding and BRRRR our first investment property, then build our portfolio.

Option 2: My mom has a property in Walnut, CA that is free and clear. She is willing to let us build on the property since it is not being used anyway. We were thinking to build a house on the land, put a renter in it, and pull out the equity to then BRRRR properties. The location of the property is among million dollar homes, so we are confident that the property will have enough equity for funding our first deal, while simultaneously acting as a SFH rental.

Would love to hear the realistic outcome from experienced investors. Which of the above is the smarter choice?

Thank you in advance!

 If you've got an asset (free land in a highly desirable area) use it. However the question is if you need funding from other investors to do your 1st deal why don't you still need the same funding from those investors to build on this lot?