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Paul Tan
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First post and ready to buy! What do you think of my strategy?

Paul Tan
Posted Sep 12 2023, 07:12

Finally got my headshot uploaded so I no longer have to lurk around the forums! XD

What are your thoughts on Starting Small (Cashflow) vs Going Big (Equity)?

Since I will invest in the Augusta, GA, I'm trying to figure out what strategy to take for the next 3-5 years. Here's the facts:
- I'm pre-approved for $330K but I can push it to $450K if I really need
- $10K-$20K Saved for down payment. $10K Saved for renovations
- Saving $800-$1400 every month
- I have access to the VA loan

(*preferred) Strategy #1: $100K-$200K purchase. ~$1000 Mortgage. Rent for ~$1000. Rinse/repeat once I can ReFi for 75% ARV. 1031 in 5 years.
Strategy #2:
Buy a SFH in a subdivision for $300K+, waiting until I have enough cash/equity and buy again. HODL.

Here are my pros and cons for each:

### $100K-200K ### <-- More Active Investment
- Higher Price to Rent Ratio
- Fast turnaround to purchasing next property (6 month before ReFi)
- Value Add repairs can improve house value a lot
- 3-4+ purchases in 5 years = More Learning Opportunities/Networking

- Higher Risk of Bad Tenant
- Maintenance Repairs
- Lemon Purchases

### $300K+ ### <-- More Passive Investment
- More equity to draw from down the road
- Good Neighborhood
- Family Tenants are safer

- Higher Operational expenses (Taxes, Insurance)
- HOA Limitations
- Typically recent builds/renovations so not much room for Rehab
- 1-2 purchases in 5 years = Fewer Learning Opportunities

I know that there is no one solution. Also, specific advice depends on me providing more details. But I always like to hear more new perspectives! So hit me with everything you've got!

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