Garage conversion or invest in new property

[Joe McKelroy]

need help here. I have 40-50k. should I convert my garage to a studio/1b apartment and rent that out or use that as a downpayment for a rental property? (it's a new construction 3bd 2b in an ok but not great neighborhood)

I don't know the value that would add to my home, but I know I profit around 400 per month as a long-term rental (renting out both units). if I furnished it or made both units an MTR, I would profit more. ($750 per mo cashflow possibly). as a 3bd 2b home, currently, it breaks even monthly. 

If I buy a 200k house in Waco right now, I could rent it and MAYBE break even with 20% down. 

what you you think is best? and why?