Should I save money for a rental or use money to flip homes?

[Paul Aqua]

Hello! I have a little bit of money saved up and will have around 30K by the end of May. I know how to find great deals on rentals ( outside of California) but I also was wondering if it might be better to use that 30k towards getting  several hard money loans and flipping a couple homes. based on the comps on the homes I have looked at The average home I have been looking at ranges from 50-85K and need anywhere from 5,000 all the way up to 35,000 in repairs. estimated profit after loans and commission on each deal ranges from 15,000 all the way up to 55,000. I am just curious on what You would do if you were in my situation.

[Alex Deacon]

@Paul Aqua with my vast experience its an easy question for me to ask myself but for you it really depends. How much experience do you have flipping homes and how well do you know the market. You may think you know it but in order to succeed you really ned to fully understand each area and street etc... You can do a flip for immediate profit but if you make a mistake you can have immediate loss. Your carrying costs can kill you if you are over budget and the home isnt selling. I would suggest a long term play. Maybe buy a duplex that needs some work and you can build some equity by fixing it up and get the rents up and then refinance and get all of your money back and potentially cash out a little money at the refinance. Thats less risky and you have a lot of room for error. On a flip the room for error is tight.