First Investment. Fix n Flip or Rental?

[Alexander Burkard]

So, next year starts my side hustle.

I'm having a hard time deciding which one to start with first. The ROI on a Fix n' Flip seems much more promising, but of course is more work. And then I could use that profit and put money down on a rental to increase cash flow.

I've worked on houses before, so it's not a daunting task and I would have a contractor with me as well.

My wife wants to start with a rental first, maybe even house hack our current duplex that is for sale, which I'm on board with but I feel like the monthly cash flow versus the ROI on a 6-8 month reno job, the fix n' flip seems to be the clear choice to me.

However the steady (almost) guaranteed cash flow would be nice to help push us out of debt.

Suggestions?

[Taylor Hudgins]

Congrats on making the move towards your first investment!  This was a tough question for us too.  Do we flip to make more money for a rental?  Do we try to just buy a rental first?  Do we house hack our way into a duplex?

So many options!  My best advice would be to really hone in on WHY you and your wife started looking into investing.  Cash flow? Fast money? Passive income?  For us, we knew absolutely that we wanted to start creating passive income.

And since we were COMPLETE newbs, we went for a small rental property that really only needed cosmetic updates (paint, carpet, etc.) because 1) we new if things hit the fan, we wouldn't go bankrupt or fall into massive amounts of debt and 2) it was "controllable" in that we didn't have to worry about major plumbing, electrical, or structural issues.  It was a great first property for us to dive into investing with.

Figure out what you're comfortable with along with WHY you actually started and begin there.  Once you have your toes in the water, the next property whether its a flip or a house hack will be much smoother.