Suggestions for my 1st Investment: Should I start with a BRRRR or focus on cash flow?

[Ximei Yue]

I am a Newbie.

Here is a summary—Any suggestions are appreciated.

I have about $50K in saving and could potentially get to $100K in cash for my very first real estate investment.

Current consideration:

• 1. Start with BRRR in some areas that have lower barrier for entry
•     Pros: Could potentially get to the second investment sooner
•     Cons: No existing contractor connections. Could run into issues. Good deals are not easy to find. 
• 2. Start with a single family home at areas where I could afford and have a stable cashflow
•     Pros: Easier to manage
•     Cons: Would have no equity to invest in my second property

Some background about myself:

• Have a full-time job ($190K a year income). Financially my full-time job is our main income as a family.
• Job is demanding. Long hours.
• With 3 young kids. One of them is just one year old. And, another one requires more support (special needs).
• Husband working on starting his own business (starting phase, no income)
• On the side, there are some income ($50K a year)

Goal:

• 1. Get to a point of having enough cash flow for me to spend less time on my job and more time with young kids in 5 years
• 2. Have a bit more control of my time.

[Ximei Yue]

Quote from @Kevin Rodriguez:

Congrats on taking the first steps toward investing—your vision and planning are impressive! With your goals in mind, here are some thoughts on each approach to help you decide what might work best for your situation:

1. BRRRR Strategy: The BRRR (Buy, Rehab, Rent, Refinance, Repeat) method can accelerate portfolio growth, but it does require strong contractor connections and careful planning. Since your job is demanding, and you're balancing family responsibilities, starting with BRRR could add stress without established connections. To get started, consider networking in local real estate groups to find reliable contractors or partnering with experienced BRRR investors who can help navigate initial projects. This way, you might mitigate some risks and get guidance for your first rehab.
2. Single-Family Investment for Cash Flow: Starting with a single-family property in a stable, affordable market might align well with your goals. Single-family homes in cash-flow-positive areas tend to be easier to manage, especially if you use professional property management. This could allow you to build equity steadily, reduce the immediate demands on your time, and potentially refinance in a few years to access funds for future investments.
3. Alternative Approach: Small Multi-Family Property: If you're open to it, a small multi-family property (like a duplex or triplex) can combine elements of both strategies. Multi-families offer more cash flow potential than single-family homes and are often easier to manage than a BRRR, giving you the chance to grow without the same level of involvement.

Given your busy schedule and family responsibilities, a single-family or small multi-family might be a good start, letting you get familiar with property management while earning stable cash flow. Once you've gained experience and have a trusted team, BRRRR could be a great second step. Let me know if you want insights on financing options! Happy to connect.

 Thanks so much Kevin for the insight!!! It is very helpful for me to think through options. Financing is definitely an area that I will need more study. Will definitely keep in touch!

[Ximei Yue]

Quote from @Taz Zettergren:

@Ximei Yue welcome to the forums! BRRR'ing is a great strategy to build equity but it's a riskier play and time intensive if you're trying to do it out of state. If you have the time and effort to build out a team of a investor friendly agent, contractors and a property manager then it's a very viable option but in todays time there will be very little to no cash flow. But again it's a great way to build equity and recycle that money.

There are some turnkey providers that are vertically integrated that might be of interest to you if you want to invest passively. Companies that purchase the home with their own money, renovate them, sell to their investors and manage for them on the back end. This is also a great way to build long term wealth especially if you're investing in higher appreciating markets like Texas. Let time do it's thing over 5-10 years, you can take advantage of the tax benefits in the meantime then 1031 exchange into lower cost, higher yielding markets to achieve those goals.

Great thing abotu real estate is if you have the capital you have options and options are always good. Everyone's goals are going to be different it all comes down to what it is you want to do and how much time and effort you want to spend. Best of luck on the journey! Feel free to reach out if I can be of any assistance

 Thanks so much Taz!! It is very helpful to know different options! Appreciate this info. I will do some learning on this

[Ximei Yue]

Quote from @James Wise:

Quote from @Ximei Yue:

I am a Newbie.

Here is a summary of what I want to ask some advice. Any suggestions are appreciated.

I have about $50K in saving and could potentially get to $100K in cash for my very first real estate investment.

Current consideration:

• 1. Start with BRRR in some areas that have lower barrier for entry
•     Pros: Could potentially get to the second investment sooner
•     Cons: No existing contractor connections. Could run into issues. Good deals are not easy to find. 
• 2. Start with a single family home at areas where I could afford and have a stable cashflow
•     Pros: Easier to manage
•     Cons: Would have no equity to invest in my second property

Some background about myself:

• Have a full-time job ($190K a year income). Financially my full-time job is our main income as a family.
• Job is demanding. Long hours.
• With 3 young kids. One of them is just one year old. And, another one requires more support (special needs).
• Husband working on starting his own business (starting phase, no income)
• On the side, there are some income ($50K a year)

Goal:

• 1. Get to a point of having enough cash flow for me to spend less time on my job and more time with young kids in 5 years
• 2. Have a bit more control of my time.

Probably wouldn't do a BRRRR on your 1st deal. Too many moving parts. Risk is higher. Buy something with 25% down. Simple.

 Thanks James! Definitely a great point. Will definitely consider this as the most viable option.

[Regina Blake]

Hi, welcome yes investing in real estate in is a great decision if you have any questions please reach out. Thanks!

[Lindsay Davis]

@Ximei Yue,

You mention that your job is demanding—do you think you'll have the capacity to handle a time-intensive BRRRR project on top of that?

If not, buying a turnkey, rent-ready property could be a better first bet. You won’t be able to unlock instant equity or recycle your capital into new deals, but your high W-2 income (and side income!) should allow you to save for your second deal fairly quickly.

Full disclosure: I run a turnkey operation based out of Birmingham, AL—happy to point you in the right direction and answer any questions that come up!

[Jake Baker]

@Ximei Yue

Pros: If executed well, BRRRR can help you scale faster. With $50K—$100K, you could fund a rehab and refinance to free up most of your equity for the next deal.

Cons: BRRRR often requires more hands-on involvement, especially managing contractors and timelines, which could be challenging with your demanding job and family obligations. With a trusted team, you might avoid delays or unexpected costs.

Advice: If you lean toward BRRRR, build a solid local network. Connect with contractors, property managers, and agents in your target market. A lower-cost market with manageable rehab scopes (e.g., cosmetic fixes rather than full gut rehabs) might be a safer entry point.