Higher Purchase Price v. Higher Rehab Cost

[Carrie Zhang]

Hi BP! I'm looking to do my first fix and flip deal in a new market, Upstate New York (Hudson Valley areas). I have rehab experience with SF long-term rentals in MI, but it has been a few years since I've been close to any construction. I think I have two options to get my first deal off the ground and would love your thoughts: 

1. Partner with a friend to work on larger projects with greater upside (600-700K total cost with 900K+ ARV)
- They have been doing luxury value-add STR (but never a flip) in the higher end Hudson Valley markets since the pandemic
- There's likely less competition at that price point
- It may take us longer to find the deal and obviously a larger projects also likely means longer timeline.  I'm at a greater disadvantage because my part of the funds has a higher financing cost 
 
2. Start with a smaller project on my own (300-400 total cost with 450-500 ARV)

- I would need to learn new markets and manage the risk of rehab on my own (I can borrow my friends contractor so this may not be as bad of an issue) 
- There's more competition at that price point
- I would be able to start and finish quicker (hopefully) and get actual flip experience under my belt

I'm currently casting a wide net for deals at both price points and I'm very eager to get started (I've committed to doing real estate full time). Would love to hear people's thoughts and if there are other considerations I should think about. Thanks!

P.S. Sorry about the confusing title - I tried to edit the post but couldn't change the title. I am originally also wanted to know, if total costs are the same, would people rather spend more on the purchase price or on the rehab? 

[Carrie Zhang]

Quote from @Hamp Lee III:

Would your friend be willing to partner on a smaller project?

Consider where you will spend a majority of your real estate investing. You can make a large sum with the first option as is, but it will be outside of what you might learn for future projects, though there will be similarities.

If there are no changes. I’d go with option 2 as well.

I wish you all the best.

 My friend is only interested in doing higher-end projects... 

Upstate New York is an interesting market because you have a lot of people who are buying as their second home(or first and have their home base in a rental in the City) and that's where most of the appreciation has come from. The smaller projects are scooped up quite quickly and have a different end user (mostly local residents) from what i can tell. So I'm wondering if it would be a good idea to enter into the higher end bigger projects as my market, or is that too much risk for my first Flip project?