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!