Best Use of Capital When Purchasing

[Kimball Carr]

Hi everyone

I am a reader and lurker here and have learned so much in a few short months from J Scott's book, the podcasts and these forums. A big thanks to everyone here for all of the sharing!

To frame up my question: My wife and I are about to embark upon this journey with the intent to do some flips as well as buy and hold rentals. We will start slow but eventually intent for this to be a main, if not the main, thrust of our income. I come from well-compensated W2 jobs and may return to one and my wife works part time. Again, the goal may be for REI to be one of our two main thrusts in the near future so I can have my freedom back.

We are currently evaluating our target areas and selecting some properties we think could be good flip prospects. I have a private investor who is a former business partner of mine who will be setting up an approximately $200K buying fund from which we will purchase, hold, rehab and flip. In our area, that dollar amount provides enough capital to do one decent single family home and cover all of the above costs  when purchasing outright, doing reno, etc. 

My question is this: as I look to maximize that capital and use it to the fullest, I believe the numbers are self evident that if I can purchase two properties with that dollar amount versus one, I can double my ROI. Does it make sense for me to use the $200K as down payments/reno/carry funds on two properties instead of buying one outright? If so, since I know I won't get conventional financing on properties needing work, are my best options portfolio lenders and hard money lenders? Is there anything I'm missing in my logic that would suggest I should stick with one at a time and using the $200K for outright purchase on a one at a time strategy? In short, I would love to know what some of you would do with that $200K and how you'd use it to it's fullest to maximize an annual ROI.

I appreciate any thoughts or suggestions you all have. Thanks!