This or that? Need help with options

[Dominick Galinis]

Hello BP fam! 

Would love to pick your amazing minds on where to put my money.

a bit of a backstory: I make good money at a job I can tolerate. So I’m not looking to retire next year. But, I do want to get my rental income as close to my expenses as possible so if I wanted to say, take a 3 week vacation, I won’t feel it financially in my bills (I work commission, no PTO) at the end of the year I’ll have around $80K to put towards something.

now, my two options:

A) I put all of the money toward a new construction house. Based on the numbers, I'll have anywhere from $30K-$60K of built in equity just from the price of the house ($30K off the bat for sure, but I could see it rise to $60K since the house is in a very high appreciating market). This would take around 10 months to complete, however, and then I can cash out refi my money back and possibly do it again. The downside I see here is I don't see my money for 10 months and I would have to pay the note out of pocket until the house is complete. I can afford that. And the COC% before refi is around 9%.

B) I use the money I have to buy 3 "smaller" properties in the Midwest. The COC% would be better prior to refi, but I wouldn't be able to pull my money out for a while until equity is built or what have you. It would bring me closer to the goal of not needing to worry about bills now, but I question the long term plan of it.

Bonus option C, something else that I’m unaware of.

thank you guys so much for your time and advice!