Best first move - BRRR vs. longterm rent & hold

[Andrew McArthur]

I'm a newbie and interested in gaining insight from more experienced investors. I'm looking at my first deal and weighing weigh pros and cons. My wife's aunt owns a home up in Washington (we're in LA- way too hot for us to start investing here). She's been renting it for 20+ years, and my wife wants to buy it from her and take over. Rent and hold long term vs. BRRR is what I'm weighing. The house is small, but I've had conversations with local realtors and assessors who tell me it's in the best location to sell or rent in the city. There aren't many SFR in this particular square mile (the assessor called it the Golden Triangle) so when they pop up, they go fast.

I'm thinking these are my next steps:

1. Get appraisal of list price

2. Get accurate appraisal of rent price (aunt's been renting under market)

3. Negotiate with aunt to sale price that discounts any realtor fees she won't have to pay and that gives us a small under-market discount.

4. Decide which strategy is best based on where the numbers land. Leaning toward BRRR.

Pros:

1. I like the idea of a known quantity property (no surprises from previous owner non-disclosures) and I know this location is going to get more and more valuable. If I had more cash for future deals, this would be a long term buy and hold. 

Cons:

1. I don't like the idea of tying up all my investment $$ (at this point, about 30-40K) in one property. I'd put down 20% on it (purchase price would probably land between 130-160K), and I'd reserve the rest in a capex fund. 

So after all that my question is, WHAT AM I MISSING?