BRRR vs Live-in-Flip vs AirBnB for NEW Investor

BRRR vs Live-in-Flip vs AirBnB for NEW Investor

Self-Employed · Indianapolis, IN · Member since 2015 · 12 posts · 2 votes

Hey everyone! 

Long time listener of the BP Podcast! I love the value this group has been providing me since day 1!

I work in eCommerce and make pretty good money. I feel like my career is moving in the right direction. I am constantly thinking of new business ideas. Knowing this about myself, I know I need to commit to some level of passive income to fund my rather frugal life that I live. My rough plan is to make my money in business and invest some of those profits in RE. 

I live in Indianapolis and know that it's a pretty popular place to invest. I see a few potential investing options that could allow me to dip my toes in the RE game while minimizing risk. I'm not trying to create a second full time job because of all the other stuff I have going on. 

I'm a 24 year old single male, so I feel like I can pretty much do whatever I want in regards to getting started. I originally was thinking of buying a duplex and renting out the other half. Pretty doable, but I'm not crazy about living in a run-down area. I lived in junky places before and I don't have too much issue in it, but it's definitely not my preference. Along these lines I've thought of maybe getting a duplex in a nicer area but doing AirBNB / STR in the other half? Might be more work then I'd like, but it's a fun little side gig nonetheless. OR do I do a live in flip, live in it for 2 years while I fix it up real nice, and try to make 50k on it?

Right now I'm leaning towards the flip because I think it'd be fun, I could live in a slightly nicer area, and I would learn a TON. I'm not overly concerned with making a ton of money with my first deal, I'm just trying to learn a lot without taking too much away from my "day job".

I know all these paths are viable, but given these options what are your thoughts? Any perspective or advise is greatly appreciated. 

Thanks so much!

Jordan

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  • Rental Property Investor · Fort Collins, CO · Member since 2015 · 273 posts · 127 votes
    7y

    If I was 24 years old and had a good income coming in and looking to invest in real estate just starting out, The duplex/4-plex is the route I would absolutely take. Location is extremely important and so I wouldn't invest in anything less than a C neighborhood. I would be just fine investing in a duplex in a C neighborhood and live in one side, renovate, move to the other side, renovate, refinance and go do it again. By the time you're 30, you could have 2-6 properties and 4-10 units. You would also be very knowledgeable about these properties, so your ability to manage effectively would be strong. 

    Good luck, make sure to share your journey. 

  • Self-Employed · Indianapolis, IN · Member since 2015 · 12 posts · 2 votes
    7y
     @Patrick Soukup 

    Thanks for the reply Patrick! I will definitely consider your opinion and will do my best to keep everyone updated on my decision. BTW, I love Fort Collins! 
  • Rental Property Investor · Indianapolis, IN · Member since 2014 · 354 posts · 167 votes
    7y

    @Jason Tressler

    I had a bnb in the broad ripple area (on kessler) and it brought in more than 3x rent could have. In my case it was economically good but you are correct that it is allot more work than a rental unit. We ended up selling the property for the equity to expand.

  • Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    When I was starting out, the live-in flip worked out well for me. I should say, I didn’t consider it a flip, and I wasn’t living in renovation dust the whole time... but I enjoyed renovating the kitchen, then adding a second bath, etc. ended up making quite a bit based on the few years of appreciation plus the upgrades. I wasn’t on a timeline, just upgraded what I wanted to,it was pretty much a hobby.

    But it all depends on what you want to spend your time doing. The benefit of rentals is (generally) less work over a longer period of time.

  • Self-Employed · Indianapolis, IN · Member since 2015 · 12 posts · 2 votes
    7y

    @Dan Perrott

    What have you expanded into? Thanks for the feedback!

  • Self-Employed · Indianapolis, IN · Member since 2015 · 12 posts · 2 votes
    7y

    @Jason Tressler

    Thanks for the input Jason! I'm thinking the AirBnB will end up causing me more hassle than it's worth given what my immediate goals are.

    Shoot me a message and let's chat!

  • Self-Employed · Indianapolis, IN · Member since 2015 · 12 posts · 2 votes
    7y

    @Mike McCarthy

    That's part of what I'm thinking. Move at my own pace, work on it when my work schedule allows, and I have a friend who's a general contractor who can help me out as need be. 

  • Rental Property Investor · Indianapolis, IN · Member since 2014 · 354 posts · 167 votes
    7y

    @Jordan Dekker - We own rentals that we self-manage.  We were in the rental game prior to trying airbnb.  Airbnb is profitable if you have the right location.   Location is everything with Airbnb to bring in the top dollar.

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