Baby Steps or Home Run?

[Drew Hoffos]

Hi Friends! Thank you all so much in advance for taking time to give your advice. 

My wife and I are looking to deploy between $180-$220k into investment properties. We live in Southern California. Our initial plan was to work slowly; purchase SFH or Duplex in the Cleveland or Indianapolis area for $70-$110k cash and then hold it and pull some $$ out after 6 months (maybe $30-$40k). Then we'd bring the rest of the cash to do it again and purchase another $70-$110k property until our whole wad was spent. We run restaurants full time and we're not looking for a new career per se. We'll be using a management company to do the day-to-day operations.

I'm familiar with some of the pro and cons of this method vs. purchasing a larger multifamily unit (8-20 doors), but only anecdotally. I have two real questions: 1) If you had this amount of cash to spend, would you try to hit the home run and buy something at the top end of your budget? (leaving enough cash reserves for emergencies, of course). 2) Depending on your advice above, what market(s) would you look into? 

Extra credit: If you're a realtor we'd be happy to take a look at inventory. 

Thank you!!! 

[Anne Marie Kodama]

@Jon Schwartz  I second your recommendation of Columbus and Remington.  We purchased two units on a lot in April and under contract for 2 duplexes right now.  The market is hot and very competitive, but there are good deals in Columbus.