New primary and rent out existing or BRRRR

[Shane Kunkle]

I'm a first time RE investor and received a personal loan for 250K at 2% over 30 years and would love to get insight.

Option 1: BRRRR deal

-This is what i originally wanted to do but with rates and prices being what they are, it's difficult to find BRRRR deals rn

-My plan would be to do a BRRRR deal out of state as CA is too expensive. Buy a house cash for ~$180K and use the remainder for renovations and reserves.

-Being a first time RE investor, doing an out of state BRRRR might be a lot to bight off at once so I'm considering option 2.

Option 2: Buy a new primary and use my current residence as a rental

-The cashflow from my existing primary will cover the cost of the personal loan. However, the new house is more expensive so it will add approx $1K to my monthly payments

My question: For those who have done out of state BRRRR deals, do you think it's wise to pursue option 1 given my inexperience or go with option 2 to get a feel for RE investing. I understand that a BRRRR done right is going to make me more profit but trying to get an idea of if out of state investing is realistic right off the bat for someone new like me. Any insight is hugely appreciated!

[Andrew Postell]

@Shane Kunkle this is always hard to do.  In reality, it's hard for us to gauge your tolerance and your full financial situation in just a few sentences.  Based on experience I would nearly always recommend investing locally.  Adding more to your expenses is normal in life.  We buy nicer things and make more money.  It would be hard to live if you made the exact same amount every year for 50 years.  So expect things to always get more expensive as the years go by.  It also might be hard to measure everything that I stated in just a few sentences here as well so feel free to ask anything else you may need.  Thanks!