Which REI Strategy to Focus On?

[Timothy Boyd]

Hi BP community! I am a newbie to REI and am having a hard time deciding on which niche/strategy to pursue in the greater Cincinnati area. I've listened to about 240 episodes of the podcast so far, read quite a few books, and have been lurking in the forums for months now. Below are my thoughts in no particular order on the three strategies I am thinking about focusing on, and I'm sure some of the thoughts are off base. Hoping you wonderful pros can help me narrow things down and call me out where I have a bad assumption. I know that he who chases two rabbits catches neither, so I really do want to buckle down and figure out what to focus on and become good at.

My Why -  I want to get out of the rat race and achieve financial freedom in the next 10 years so that I can travel with my wife and play guitar all day!

Flipping SFH:

- PROS:

o   Higher potential velocity to financial freedom because of larger profits on each transaction.

o   No landlord/tenant issues.

o   I have a tiny bit of experience renovating and restoring houses I have owned, and I enjoy it for the most part.

- CONS:

o   Not really “investing” because you don’t hold any asset. 

o   Not passive at all.

o   Speed is of the essence and I am not sure how quickly I can move while working full time.

o   Transactional and more vulnerable to market swings.

BRRRR Multifamily:

- PROS:

o   Long term wealth building. 

o   Take one initial stack of capital and continue to roll it into more properties as you refinance.

o   Tax advantages.

o   Tenants pay down mortgage.

o   Spreading the vacancy risk in multifamily.

- CONS:

o   Potential for tenant headaches/evictions. 

o   Not passive.

o   Slower velocity to financial freedom as the portfolio is developed.

Vacant Land (targeting tax liens):

- PROS:

o   Passive.  No maintenance other than taxes.

o   Option of selling or sitting on it.

- CONS:

o   Illiquidity.

o   Adding value (running utilities/sewer) is speculative.

o   Unsure if this can be a standalone route to financial freedom.

TL;DR – Newbie trying to figure out which strategy to focus on as I am struggling weighing the pros and cons of each.

Thank you for any insight and advice!