New built home or old distressed one for same price?

[Rafael P Martinez]

Currently I am looking to buy our first home and I'm divided over what property to buy in SoCal.

We have been looking at homes built on the 50's or 60,s  with 3 beds and 1200 to 1500 sq feet listed for $700K to $750k most of then need seriuous updates and very extensive reno work (Over $60k reno cost) My idea was to do a live in flip and force equity.  So basically buying me a headache. End goal was to get some equity refinance get my money out and buy another property.

At same time im looking a new construction homes with over 2500 sq feet, 4 to 5 bedrooms, for $650 to $700K and nothing to worry about. A perfect dream home.

I am divided about what route to follow, why spending more money on a trouble home when I can get one outta the box for less money?  Why should I spent big cash on top of buying price to do renovation work? I could take that reno money and put it down on a different property. Also construction companies are giving some incentives and free updates because of the current market conditions.

I know new build homes have less room to force equity, but there is room to upgrade if I buy the one without any of the upgrades offered.  I could replace carpets for hard floor, do patio features like grill area and patio build, other small cosmetic updates.  I could sit on the property for a year and wait for inflation do its thing,  wait for value to go up as it does here in California. I think this strategy could give me enough equity to refinance and get some cash out.

At the end, my goal is to recoup enough money for another down payment. Let say $60k.

What are your thoughts ?