There are other reasons to purchase an investment property other than cash flow - appreciation in a high growth area.

Quote from @Jourdan Mercer: A mentor can really accelerate your growth, no matter what level you're currently at.

I think the only merit to this is if taxes in your area are really high meaning hundreds and hundreds in negative cash flow and a long path to profitability either due to this or rent stagnancy.Since this house is in Arizona, which from all indications is a fairly strong rental growth market, and you could feasibly have the house for nothing into it with a good chunk of cash in the bank to cover the temporary negative cash flow, I would probably just go option 1 assuming the taxes are reasonable.

Lots of yield (16% is easy these days in beaten down reits) and growth opportunities in paper equities now.   

Do you think that the area of houston that this house is in is likely to see consitent appreciation and rent growth?

@Edgar GarnysNeed to have clear investment goals.Understand the local market and potential growth aspects.Also factoring in the rising interest rates and inflation.Good luck!

The city has seen substantial job growth and population growth in recent years.

Hi @Brandie DeNelle, congratulations on getting started and I love your game plan. 3 properties in 5 years is totally achievable using the house hacking strategy and BRRRR's to accelerate the growth.

Taking into account that cash on cash is usually zero the first year is not something that I originally considered; so, it will be immensely helpful to know this before going through it myself (and freaking out). 

The highest and best use with conversion of your property might not be allowed or wanted in the future for the county or city's growth plans.Sometimes in an area something like industrial might be grandfathered in but they want retail now as area has changed or multifamily etc.