Please Help! Life Changing Decision Required!

[Gabriel Harrison]

I have a conundrum that has constantly been filling my thoughts and I desperately need some advice. Please help internet!

Here is my current status : My end goal is to be a real estate investor with enough rentals to make me 300k+ a year (I estimate this to be around 50 houses assuming each house makes me $500 a month). Right now I am 25, I have a stable steady job making 60k, I have great credit, I own a home in Parkville MD valued around 150k and I have about 10k of my own money to invest. I realize this is not enough money to buy a house and renovate one BUT that’s why loans exist(either hard money, credit card, or private loan from parents).

Here is my question:

Would it be better for me to start by flipping houses to acquire more cash OR would it be most beneficial for me to use the 10k as a down payment on a 40k house, use credit card loans to fund the rehab of the house and then rent it out (either traditionally or section 8)? In the areas I am looking at, median rentals are $1,000 – 1,200 a month (26% ROI).

The twist:

Currently, I live in the County (Baltimore) – but really want to move down into the city as soon as I can with my girlfriend who lives with me as well (she will be making around 50k). I am worried that if I do venture down the path of securing a rental home, it would deplete my down payment money AND raise my debt to income level to a level I would be unable to secure another loan for the house is the city. I also want to keep my current home and rent it out (My mortgage is 978 and I can rent it out for around 1300) – this isn't a great ROI but the area it is in is slowly increasing in value three years ago I purchased it for 142k and now it's is valued at 10k more at least.

Flipping would allow me to gather more cash, faster, which I could use both towards buying a home in the city for myself AND buying homes for rentals. Buying rentals would get me on track with my end goal and be a better investment long term but it may impact my debt to income ratio and deplete the little money that I have now.

Thanks in advance!

Gabe