This or that? Need help with options

[Dominick Galinis]

Hello BP fam! 

Would love to pick your amazing minds on where to put my money.

a bit of a backstory: I make good money at a job I can tolerate. So I’m not looking to retire next year. But, I do want to get my rental income as close to my expenses as possible so if I wanted to say, take a 3 week vacation, I won’t feel it financially in my bills (I work commission, no PTO) at the end of the year I’ll have around $80K to put towards something.

now, my two options:

A) I put all of the money toward a new construction house. Based on the numbers, I'll have anywhere from $30K-$60K of built in equity just from the price of the house ($30K off the bat for sure, but I could see it rise to $60K since the house is in a very high appreciating market). This would take around 10 months to complete, however, and then I can cash out refi my money back and possibly do it again. The downside I see here is I don't see my money for 10 months and I would have to pay the note out of pocket until the house is complete. I can afford that. And the COC% before refi is around 9%.

B) I use the money I have to buy 3 "smaller" properties in the Midwest. The COC% would be better prior to refi, but I wouldn't be able to pull my money out for a while until equity is built or what have you. It would bring me closer to the goal of not needing to worry about bills now, but I question the long term plan of it.

Bonus option C, something else that I’m unaware of.

thank you guys so much for your time and advice!

[Marc Rice]

Buy 3 rentals in Ohio and don't build the new construction. You could add value to them and refinance those and buy more or use that money to build that new construction if your heart is set on it. New construction is risky if you don't know what you're doing