If you were just starting out and had $150,000 to invest in real estate where would you begin?

[Gina Dovel]

If you were just starting out and had $150,000 to invest in real estate where would you begin? ( This is me! I would like to have at least $4000 a month in income by the end of the year.) 

[Joe Villeneuve]

@Gina Dovel I think you're heading in the right direction, but you're thinking old school and placing limits on your cash power this way. Your goal of using the cash flow to pay your new mortgage on you residence is a good idea, but it should be accomplished as part of the plan...not the main goal.  Here is what I would suggest:

1 - Focus on repeated use of this $150k, not just a one time use (as you suggested for paying down your primary).
2 - Use the funds to buy a series of cash flow properties.  You will refinance each of them, using the funds from the refi to buy the next one.
3 - Repeat.  This way, that $150k should have an unlimited lifespan.

I can give you a current example here using the market I know here in SE Michigan.

Rental Profile:  3 Bed/1.5 Bath; 100 sf ranch:  Bank Property
CF (w/PM & refi) = $325/month;     Cost all cash = $ 50,000 (w/rehab);      ARV = $72,000

Steps - 
1 - Buy/Rehab property
2 - Place tenant & refi within 2 months at 70% ARV = $ 50,400 (fees are less than $400)
3 - Use refi cash to repeat on next house, and so on and so on, and so on, and...
4 - Each repeated use of funds (the same funds) = a rental left behind @ $400/month
5 - With $150k, you could be doing this 3 at a time, so your $150k could be = $1500/month per use.
6 - 3 uses per year generates $4500/month/year, and...
7 - You keep going.
8 - Another great part is if you look closely, you are never actually spending your $150k since you keep getting it back after every refi.  Refi the last 3 houses, get it all back, never having spent it.