50k now or 150k in three years?

[Kim Leduff]

Hi BPers!

Currently we are building out the Garage in our Los Angeles based property to be it's own 1 bedroom. I have some extra cash right now I can use to either invest in the market and save for maybe 3 Years to potentially build another unit on this property, or an other scenario came to mind and I am hoping you can help me pick it apart.

If...

• Each year I have about 10k to invest and play with
• The cost of the extra ADU build will take 3 years to save (30K my cash and 120K loan) and the potential rent would be $2000
• I have the ability to purchase out of state homes at less than 50k that has a true cashflow of $200+ 

Would you...

• Invest in the market earning 7% and build the ADU on the land you already own in 3 years?
• - or-
• Invest in 50K properties for the next tree years making $250 cashflow each. 1st year 1 home $250 - 2nd year 2 homes $500 - 3rd year 3 homes $750 

Trying to keep it concise but let me know If i am missing any important information to gauge the best strategy. Partially believe money now is better than money later, but also know the risk added complications of out-of-state investing and multiple properties can be a downside to the convenience of the cashflow.

Thanks in advance!

[Josh Caldwell]

The properties that you buy now will appreciate and give you tax advantages that sitting on that money wont do for you. There is an  old saying in real estate, "a quick nickel is better than a slow dime every time"