Four 100k rentals or one 400k rental? (Newbie investor)

[Renuka Lokare]

Hi all, I am new to real estate investing. As a first investment which one of the options below would you go for:

1. Buy four 100k units over next 3 years

Pros: needs lower down payment, diverse, lower risk

2. Wait for 1.5-2 more years to build up down payment for a single 400k rental with multiple units

Pros: less closing costs, potentially higher cash flow

[Preferably I don't want to house hack / go all down to build up 80-100k down payment]

Also as a first time investor would you consider in state or out of state options?

[Cassi Justiz]

I would start now with smaller price points and work your way up. Interest rates are great right now, so your money can be leveraged in a great way. There's no reason to not jump in right now if you can find something that meets your criteria. 
It's a lot easier to build up a 20k down payment than it is to build up 100k. Also, no one knows for sure but it's entirely possible that prices and/or interest rates could go up between now and then. So while you are waiting to build up your down payment, the 400k multifamily home of today could be 500k in 2 years. *The opposite could be said as well, but no one knows for sure what the market is going to look like in 2 years. 

As for in state vs out of state, I'd start by looking in state first. If you can buy something close to home that hits your criteria, then that's absolutely where I'd start. If you don't have good options in your area that hits your price point, then I'd start branching out. Out of state investing can be done just as efficiently as in state investing, but if given the choice I'd always invest in an area that I know. 

Good luck!