Go all in or spread investment out?

Question

If you had $200k to invest in real estate, would you put it towards a down payment on a single property or spread it over multiple cheaper properties?

My specific scenario is buying in an expensive, high growth/appreciation market. Less concerned with cash flow. Deciding between buying one duplex in a well-established neighborhood or several cheaper SFH in a transitional neighborhood with all signs pointing to high growth over the next few years.

What would you do?

Charles Carillo · Answer

@Christine Walthall

This is a great question. How long do you want your money tied up for? A market and neighborhood that is more established and has higher growth should allow you to exit or refinance faster while extracting a larger percentage of your initial investment. Investing into a neighborhood that is gentrifying is a little more tricky. Are the subject properties actually in the wave of gentrification or are you pushing the line by a number of blocks? It will give you an idea of how long you will need to wait to create/capture value. When investing in neighborhoods that are gentrifying; you want to see progress all around the subject properties; properties that are renovated, properties that are currently being renovated and the ones you want to purchase.