So, which way would you go?

[Rich S.]

Good day all. Looking for thoughts on what you would do in this scenario. I know folks experiences and levels of REI are all over the map on here, but considering the following set of goals and potential deal, curious what folks would do if they were starting today.

GOAL- To develop a portfolio that generates 10-15K per month in cash flow by 50.... I'm 37 now. The basic goal is to provide passive income to allow for more freedom of time down the road AND a vehicle to provide for retirement income along with long term wealth. They way I see achieving the goal is SFH or small multi unit properties, eventually into larger multi unit properties in order to have more doors with less roofs.

I foresee flipping a few properties a year to generate cash to acquire buy and holds along with the BRRR strategy.

The DEAL- low price entry home... After walking it with a contractor I trust today and speaking with the agent, I think I can acquire for right around $20,000 and with about $20,000 in rehab, I'm fairly confident in a $65,000 appraisal/sale.  Option 1- HOLD/RENT- I've found a local credit union who would do a 70% cash out on the property.  If numbers worked, I would finance out all the money, with a potential for an extra $4,000 or so.  I'd have no money in the deal and cash flow approximately $300/month after accounting for all expenses, vacancy, cap ex, etc..  OR Option 2- FLIP- basically make approximately $20,000 on the flip portion to put into another project. 

What would you do?

Also, how has an either/or changed our rehab decisions?  Just thinking if I were to rehab to rent I'd want solid finishes that hold up, but nothing crazy cost wise, but I'd want to be able to pull all my money out so which areas will I get the most bang for my buck on appraisal?

Thanks for any and all feedback.   

[Aaron K.]

It is going to depend on your area to see if your math holds up, but in most places $65,000 ARV is not going to be a great house or area so you might have higher repair costs over time (but again I don't know where you are planning on investing). You may also hit the loan wall unless you pay off some of these properties in full which may slow down your timeline a bit. That's my 2 cents