Starting out: Flips or Rentals?

[Jon Stephens]

I've started looking at a variety of deals to try and figure out the first step I want to take to get things going.  My ultimate goal is cash flow for financial freedom, so I know my end-game is for sure going to involve rentals, but I've read a lot of advice to start with flips.  

I've got about $175k cash to invest.  I've scoped out a collection of units that will cash flow $2,000/month for about $600k. The BP calculators considered this a pretty strong deal.  My concern is that buying this will leave me too ill-liquid to roll the snowball any further in any reasonable amount of time.  

Would it be better to do flips until I get a bit larger egg?  Would it be better to purchase perhaps lower cash-flowing properties that won't require as much capital in parallel?

For what it's worth, I get that every situation is different and ultimately everybody has to make the decision for themselves... That said, as a newbie looking to surround myself with as much sage advice as I can before I jump!

[Aaron W.]

@Jon Stephens Flips can get you a nice pile of cash if you do it right. If you know rentals are going to be your ultimate strategy, then why not just start there?

What is your specific financial goal in order to reach financial freedom? In other words, what cash flow do you need? 

The capital does not always have to come from you when investing. You can consider partnering with others who have complementing skills to take down properties. 

Best of luck!