Stocks vs. Real Estate Investing (I am new to investing)

[Donggie Hong]

Hello,

I have about between $200,000-$300,000 in my bank account. I am renting now in Minnesota and have never bought a house before, but I am debating if I should I use most of the money to invest in stocks or buy a rental property. My planning was buying a multi-family property that needs to be flipped maybe with two to three units in Chicago, fix it with my friend who is a general contractor and then rent it out. Ideally, I want to fix up the basement and live in the basement while renting out other two units above the ground. Then, I want to use my first property as a collateral and buy a second property with the loans. But the property prices have gone up a lot recently and I do not know if Chicago is a good city to buy a rental property because of its high property tax rates. I am not also sure if I am getting a good deal for the run-down property because I do not know how much it is going to cost to fix everything. Alternatively, I could keep renting for myself and invest most of the money in stocks? But if I want to get serious in real estate investing, where do I go from here? Should I look into other cities with lower tax rates and higher projected appreciation even though my close general contractor friend lives in Chicago? Decent multi-family properties in a good neighborhood in Chicago ranges from $200,000-$350,000. Do I really need to spend all of my money to buy one property in a good neighborhood and rely on it for my income or buy a cheap property in a bad neighborhood and invest rest of the money in stocks? (P.S. I can't take out any loan for my first property because I don't have job now and I just want to retire with the money now) 

Thank you

[Amber Gonion]

@Donggie Hong bank to the question about stock market vs real estate, we tell our clients not to put everything in real estate, be sure you have money diversified. Real estate is solid, but as we have seen in the last year anything can happen so having several revenue steams is best.