Scaling with newer homes

[Brandon Ja]

Good morning BP family.  I am fairly new to investing and my wife and I are looking at buying our second property.  We would like to purchase newer homes (currently looking at 2020 and newer).  I understand the cash flow and cash on cash return will be lower, but we are looking at holding these properties for the foreseeable future so, we are expecting to make up for this with appreciation.  The problem I am having trouble solving is will purchasing these types of assets allow us to scale.  I am worried about putting down a large downpayment and having that money stuck in the house for years.  What type of financing strategies will allow us to scale without burning through our downpayment funds on the first 2 purchases?  Is this even feasible or is the BRRRing or fix and flip our primary ways of scaling?  Thanks in advance.

[Caleb Brown]

New builds are not going to be fast scalers unless you have high income to continue doing DP. Finding BRRRs or fixer uppers is rare since 2020 is only 4 years ago. It doesn't mean new builds are bad it's a long term game. You will have no or very little cash flow within the first few years but if you have strong income and savings you'll be OK. They will have strong appreciation and you will not have issues with tenants.