Money saved. Best strategy?

Question

Is there a real estate investment strategy that is more conducive/advantageous to someone who has cash available? (Example: person has 100k, 200k, etc. for investing)

Scott E. · Answer

Your profile says you're in Orange County, so I'm going to take that into account here. I live in an expensive market as well (Scottsdale). The simple answer to your question would be:

-In a market like Scottsdale or Orange County: No there is not much of an advantage for somebody who has $100k in cash available. You need closer to $250k to really start seeing an advantage. Unless you're willing to buy out of state.

-In a market like Detroit, Cleveland, or St Louis: Yes there is quite an advantage for somebody who has $100k in cash available. Whether you want to buy rentals, do BRRRR's, flip. You have options in these cheaper markets.

Malcomb Stapel · Answer

Where to start? There's a lot of options out there. Off the top of my head

- Go all in on a nice commercial building that cashflows well

- buy a lot of SFR in a cashflow low barrier to entry market

- flipping

- finance other peoples deals. Look to do a lot of short term transactions that generate a nice cash return.

John Morgan · Answer

@Kelly Harp

I’d use it to buy SFR with 20% down on as many as you can get. I’ve turned 100k of my own money into generating 13k/month in passive income from SFR since I started investing 8 years ago.

Travis Biziorek · Answer

In my opinion, yes... depending on your goals.

I'm going to assume you want to build cash flow initially but still have upside apprecation.

This is what I wanted to do in 2019. I chose the Detroit market. It made a lot of sense for me for a bunch of different reasons.

I had $280k in access to capital spread between savings, a HELOC, and a 401k loan. Here's what I did:I purchase homes for cash in the $50-$60k range. I did some light reno work. Then I refinanced out.

Two of them were big BRRRR wins. The rest were a mix of singles, doubles, and tripes. But I always did better than simply putting 25% down upfront.

At first, this process scales slower. But give it some time and it drastically outperforms buying with 25% down upfront.

If you have $100k+ in cash this is the way to go IMO.

Michael Dumler · Answer

@Kelly Harp, this is one of those questions where you'll get a bunch of "it depends" responses. That being said, many of my out-of-state clients do invest in rent-by-the-room properties which take a good bit of capital ($100k-$140k) to implement. The strategy can produce higher yield cash flow but you do assume more risk. If you have any questions regarding rent-by-the-room investments or the Atlanta market in general, feel free to shoot me an email or text to connect (contact info is listed in my bio).

Doug Smith · Answer

I would take the question in another direction. Real estate investing has more to do with know-how and connections than it does capital. For instance, if you have a great GC, know construction and real estate, and have the hook up to get great deals, then you're farther along than someone with none of those things, but have capital. Periodically we partner with people with money that don't have the experience and it gives them the experience to step out on their own. That being said, I've found that small flips are a good place to start if you lack a ton of capital. Do a couple of flips, build money in the coffers, and then hold the next one. Do a couple of more to build back your capital, hold another. We still to this day tend to start into a renovation deal with dual exit strategies...one where sell and other where we old. Whichever is best when we get to the end of the renovation is the direction we go. If we list a property and it sits there a bit, we'll rent it out for a while and, when the lease is coming up, we'll revisit the strategy on the property. I'm not sure if that helps, but that's how we do it.

Bob S. · Answer

All depends on how much cash you have . Then I can provide a more detailed response

Money saved. Best strategy?

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