Stocks vs. Real Estate Investing (I am new to investing)

[Donggie Hong]

Hello,

I have about between $200,000-$300,000 in my bank account. I am renting now in Minnesota and have never bought a house before, but I am debating if I should I use most of the money to invest in stocks or buy a rental property. My planning was buying a multi-family property that needs to be flipped maybe with two to three units in Chicago, fix it with my friend who is a general contractor and then rent it out. Ideally, I want to fix up the basement and live in the basement while renting out other two units above the ground. Then, I want to use my first property as a collateral and buy a second property with the loans. But the property prices have gone up a lot recently and I do not know if Chicago is a good city to buy a rental property because of its high property tax rates. I am not also sure if I am getting a good deal for the run-down property because I do not know how much it is going to cost to fix everything. Alternatively, I could keep renting for myself and invest most of the money in stocks? But if I want to get serious in real estate investing, where do I go from here? Should I look into other cities with lower tax rates and higher projected appreciation even though my close general contractor friend lives in Chicago? Decent multi-family properties in a good neighborhood in Chicago ranges from $200,000-$350,000. Do I really need to spend all of my money to buy one property in a good neighborhood and rely on it for my income or buy a cheap property in a bad neighborhood and invest rest of the money in stocks? (P.S. I can't take out any loan for my first property because I don't have job now and I just want to retire with the money now) 

Thank you