{"id":188829,"date":"2026-07-30T08:00:17","date_gmt":"2026-07-30T14:00:17","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=188829"},"modified":"2026-08-03T07:00:35","modified_gmt":"2026-08-03T13:00:35","slug":"where-should-you-park-cash-between-real-estate-deals","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/where-should-you-park-cash-between-real-estate-deals","title":{"rendered":"Where Should You Park Cash Between Real Estate Deals?"},"content":{"rendered":"<p><i><span style=\"font-weight: 400;\">Sponsored by <a href=\"https:\/\/www.connectinvest.com\/?utm_source=biggerpockets&amp;utm_medium=sponsored_content&amp;utm_campaign=investor_acquisition_2026&amp;utm_content=cash_between_real_estate_deals_article\" target=\"_blank\" rel=\"noopener\">Connect Invest<\/a>.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">If you&#8217;ve ever gone in as an LP on a syndication, you already know this trade. The GP does the underwriting, manages the asset, and handles the three a.m. phone calls. You get distributions and upside, but you&#8217;re not the one on title, and you&#8217;re not the one running the deal.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Notes ask you to make a similar trade on the debt side. Connect Invest sources the loans, underwrites them, holds the paper, and manages what happens if a borrower stops paying. You get a fixed, contracted rate\u2014paid monthly\u2014without ever touching a title company, a BPO, or a delinquent borrower.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That trade buys you three things a single mortgage note can&#8217;t: diversification across a portfolio of loans instead of one borrower, a known exit date you pick up front (six, 12, or 24 months), and a $500 minimum that doesn&#8217;t require $40,000 sitting around just to get started.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Worth naming plainly, since I&#8217;d rather you hear it from me than find it in the fine print: what you&#8217;re holding is a note issued by Connect Invest, not a lien with your name on a property\u2014the same way an LP interest doesn&#8217;t put you on a deed. You&#8217;re trusting Connect Invest&#8217;s underwriting and balance sheet instead of your own. In exchange, you get diversification, zero servicing work, and a fixed payment that doesn&#8217;t move with the market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">That doesn&#8217;t make it the right home for every dollar. It makes it worth knowing where it fits\u2014and that starts with being honest about which pile of cash you&#8217;re actually working with.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">You&#8217;re Doing This Right Now<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you&#8217;re actively buying, you&#8217;ve got cash sitting in one of three places:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Reserves: <\/b><span style=\"font-weight: 400;\">Your six months of PITI plus the what-if-the-HVAC-dies money\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dry powder:<\/b><span style=\"font-weight: 400;\"> The pile waiting on a deal that hasn&#8217;t shown up yet<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Post-sale proceeds: <\/b><span style=\"font-weight: 400;\">Money from something you sold and aren&#8217;t exchanging<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">None of that means you&#8217;re undisciplined. Deals are lumpy. You can&#8217;t time an acquisition to the week your reserve number changes, and anybody who tells you they can is selling a course.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The mistake is treating all three piles like they&#8217;ve got the same job.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Quick 1031 Detour, Because I See This Constantly<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you&#8217;re inside a <\/span><a href=\"https:\/\/www.biggerpockets.com\/blog\/1031-exchange\" target=\"_blank\"><span style=\"font-weight: 400;\">1031 exchange<\/span><\/a><span style=\"font-weight: 400;\"> window, your proceeds are with a qualified intermediary, and you cannot touch them. The second you take constructive receipt, the exchange is dead, and you owe the tax.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So if you ever see somebody suggest parking exchange money in an investment during the identification period, close the tab. That&#8217;s not a strategy; that&#8217;s a lawsuit.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What <\/span><i><span style=\"font-weight: 400;\">is <\/span><\/i><span style=\"font-weight: 400;\">fair game is all the money orbiting the exchange:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Your boot<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/www.biggerpockets.com\/blog\/down-payment\" target=\"_blank\"><span style=\"font-weight: 400;\">down payment<\/span><\/a><span style=\"font-weight: 400;\"> cash for a replacement property you haven&#8217;t identified<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proceeds from a sale you decided to just eat the taxes on<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">That money is yours; it&#8217;s idle, and it lands in a savings account by default because nobody ever tells you where else to put it.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Tier Your Cash Like You Tier Your Properties<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">You&#8217;d never underwrite an <\/span><a href=\"https:\/\/www.biggerpockets.com\/guides\/the-ultimate-guide-to-short-term-rental-properties\" target=\"_blank\"><span style=\"font-weight: 400;\">STR<\/span><\/a><span style=\"font-weight: 400;\"> and a long-term rental the same way. They involve different jobs, math\u2014everything. Cash is no different.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Here\u2019s a look at the kinds of cash you\u2019re saving:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tier 1 <\/b><span style=\"font-weight: 400;\">is money that might move this month: reserves, tax payments, the roof fund. It stays liquid and insured. You&#8217;re not trying to win here; you&#8217;re trying to be able to write a check on a Tuesday.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tier 2<\/b><span style=\"font-weight: 400;\"> is money you know isn&#8217;t moving for six months or more and you could afford to have at risk, such as dry powder on a deal that&#8217;s nowhere close or sale proceeds. This is the pile almost everybody accidentally leaves in Tier 1.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tier 3<\/b><span style=\"font-weight: 400;\"> is already on the ground.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This entire article is about Tier 2. That&#8217;s where the leak is, and it&#8217;s a bigger leak than you think.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">So What Is a Note?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Technically, you&#8217;re buying a note issued by Connect Invest under a Regulation A offering, and the money funds a portfolio of private residential and commercial real estate loans secured by first-position <\/span><a href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-lien\" target=\"_blank\"><span style=\"font-weight: 400;\">liens<\/span><\/a><span style=\"font-weight: 400;\">. You&#8217;re not holding a lien with your name on it. Most sponsored posts blur that line, and I&#8217;d rather just tell you.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here&#8217;s why the structure fits Tier 2 specifically: You know the exit date going in. Right now it&#8217;s a six-month note at 7.5%, a six-month rollover at 7.75%, a 12-month at 8%, and a 24-month at 9%. Pick your term, know your date. That is a wildly different animal than a syndication telling you it hopes to return capital in three to five years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The income is fixed and monthly. Payments start the month after the note activates, and the rate doesn&#8217;t move. If it\u2019s a bad week in the market, you get the same payment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The minimum is $500, and they opened to non-accredited investors in 2022. You can put in $500 to see how the mechanics feel before you decide anything.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Actual Menu<\/span><\/h2>\n<table>\n<tbody>\n<tr>\n<td><b>Where It Sits<\/b><\/td>\n<td><b>Yield, July 2026<\/b><\/td>\n<td><b>Access<\/b><\/td>\n<td><b>What&#8217;s Behind It?<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Regular savings account<\/span><\/td>\n<td><span style=\"font-weight: 400;\">0.38% national average<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Anytime<\/span><\/td>\n<td><span style=\"font-weight: 400;\">FDIC insurance<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">High-yield savings<\/span><\/td>\n<td><span style=\"font-weight: 400;\">4% to 4.5% at the top<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Anytime<\/span><\/td>\n<td><span style=\"font-weight: 400;\">FDIC insurance<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Six-month T-bill<\/span><\/td>\n<td><span style=\"font-weight: 400;\">About 3.9%<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Sell early at market price<\/span><\/td>\n<td><span style=\"font-weight: 400;\">U.S. government<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Publicly traded REIT<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Varies, plus price swings<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Anytime<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Equity, priced daily<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Connect Invest Notes<\/span><\/td>\n<td><span style=\"font-weight: 400;\">7.5% to 9%, annualized<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Locked for the term<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Unsecured company note; underlying loans are collateralized<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">No one is looking to compare 8% to 0.38% and act like they\u2019ve discovered fire. If your money is sitting at the national average, go open a high-yield account this afternoon, and you&#8217;ve fixed most of this for free. That&#8217;s not a sponsored tip; that&#8217;s just true.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The real question is what you do with Tier 2 money that&#8217;s already earning 4%. That&#8217;s where notes get interesting.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Run the Numbers<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you have $50,000 in Tier 2 money and you&#8217;re not buying for at least a year, here\u2019s a comparison:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regular savings at 0.38%:<\/b><span style=\"font-weight: 400;\"> $190<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Good high-yield account at 4.15%:<\/b><span style=\"font-weight: 400;\"> $2,075<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>12-month Note at 8%:<\/b><span style=\"font-weight: 400;\"> $4,000, paid to you at roughly $333 a month while you wait<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The $1,925 return between the high-yield account and the note is the number to actually think about. That&#8217;s what you&#8217;re getting paid for giving up liquidity and taking credit risk instead of holding FDIC insurance.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It might be worth it to you, and it might not. But $333 a month covers the insurance premium on a couple of my units, and it covers a full cleaning cycle plus consumables on the Bastrop side, so I know what it&#8217;s worth to me.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Who This Is Wrong For<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If the money might move in the next six months, stop reading. A six-month note is locked for six months. Tier 1 stays Tier 1, no exceptions; I don&#8217;t care how good the rate looks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And if you need FDIC insurance to sleep, stay in the high-yield account and don&#8217;t feel bad about it. A Note is an unsecured claim on Connect Invest, not a federal backstop and not a lien in your name, and borrowers do default.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/www.connectinvest.com\/?utm_source=biggerpockets&amp;utm_medium=sponsored_content&amp;utm_campaign=investor_acquisition_2026&amp;utm_content=cash_between_real_estate_deals_article\" target=\"_blank\" rel=\"noopener\">Connect Invest<\/a> reports a historical default rate under 0.22%, and Ignite Funding has been writing these loans since 2011, which is a real track record. But past performance doesn&#8217;t promise anybody anything. The offering circular has the whole picture. Read it before you move money around.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Everybody else: This is the part of your cash stack that&#8217;s been asleep.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Final Thoughts<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Diversification for an active investor isn&#8217;t &#8220;own some index funds too.&#8221; It&#8217;s refusing to let a dollar in your business sit around doing nothing.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your properties and reserves each have a job. The money in between deals should have one too.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sponsored by Connect Invest.\u00a0 If you&#8217;ve ever gone in as an LP on a syndication, you already know this trade. The GP does the underwriting, manages the asset, and handles [&hellip;]<\/p>\n","protected":false},"author":613755,"featured_media":185501,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7385],"tags":[],"class_list":["post-188829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613755"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=188829"}],"version-history":[{"count":3,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188829\/revisions"}],"predecessor-version":[{"id":188891,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/188829\/revisions\/188891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/185501"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=188829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=188829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=188829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}