Newbie investor question on what to do with $100K

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Newbie investor question on what to do with $100K

Antonia Hyman
New to Real Estate · NY · Member since 2019 · 7 posts · 9 votes

Hi Everyone,

I'm looking for advice as a newbie on what to do with $100K set aside to invest in real estate. What would you do with that money if you were me? A couple of quick things about me for context:

- I'm 30 years old and have paid off all my undergrad and graduate student loan debt. I don't have any other debt.

- My partner and I own our condo in New York. I'm fortunate that he covers the household expenses, so I have minimal expenses.

- I've worked as a corporate attorney for the past four years, but have an interest in doing something entrepreneurial so I would expect my cashflow to decrease in the latter half of the year as I launch my business.

- I've saved ~$125K to provide for at least a year of living expenses and startup costs. This is separate from the $100K I've set aside to invest and separate from my retirement savings. 

- Investing in New York seems prohibitively expensive, so I'm open to investing in other markets.

Any advice is welcome! Thank you very much. 

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Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
4y

In the immediate future I would get ready for a lot of inquiries in your inbox on how a lot of people think you should spend your $100k. 

5Reply
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  • Justin Vogelgesang
    Investor · Fort Worth, TX · Member since 2021 · 68 posts · 57 votes
    4y

    Hey @Antonia Hyman, I think any accurate advice for you would ultimately come down to what your plan is long term. Are you looking to buy and hold properties for long term cash flow? Or STRs? Fix & flips? I can't imagine $100k going very far in NY, but then again that is a market I am not familiar with. 

    An out of state market would be ideal in that sense, but that comes with different hurdles. For rentals, you'll need a property manager of course. If you do out of state flips, then a reputable contractor and real estate agent will be someone you'd want to be in contact with. I personally would be more interested in flipping homes and using hard money for the first few investments until I had more cash at hand. At which point, find an STR in a growing area for passive income while I keep doing other projects

    1Reply
  • Joshua JanusBusiness Member
    Realtor · Cleveland, OH · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    Purchasing a turnkey rental in Columbus, Ohio and partnering with a property manager, or even an airbnb manager, would be putting your saved up capital to good use. 

    [email protected]614-502-5316Podcast Guest on Show From DoorDasher to $1.5 MILLION in Real Estate (All at 22 Years Old!)
    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Originally posted by @Antonia Hyman:

    Hi Everyone,

    I'm looking for advice as a newbie on what to do with $100K set aside to invest in real estate. What would you do with that money if you were me? A couple of quick things about me for context:

    - I'm 30 years old and have paid off all my undergrad and graduate student loan debt. I don't have any other debt.

    - My partner and I own our condo in New York. I'm fortunate that he covers the household expenses, so I have minimal expenses.

    - I've worked as a corporate attorney for the past four years, but have an interest in doing something entrepreneurial so I would expect my cashflow to decrease in the latter half of the year as I launch my business.

    - I've saved ~$125K to provide for at least a year of living expenses and startup costs. This is separate from the $100K I've set aside to invest and separate from my retirement savings. 

    - Investing in New York seems prohibitively expensive, so I'm open to investing in other markets.

    Any advice is welcome! Thank you very much. 

    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

    https://www.biggerpockets.com/blog/core-four-real-estate-team

    I invest locally in Columbus, Ohio

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    0Reply
  • Eric Morel
    Member since 2021 · 98 posts · 53 votes
    4y

    Give it to me....Just kidding.  It really depends on your goals.  Fix and Flip can be very profitable, but can also take a lot of time, research, and oversight.  Buy and hold rentals can create long term cashflow, but can be a headache if you dont want to be a landlord.  etc

    I agree with the post about the big four.  Regardless whichever. way you go. build your team up and then execute whatever plan you take.

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    4y

    @Antonia Hyman there are some good markets within a couple hours of you in CT, PA and NJ.  While you of course can be successful investing anywhere, I think it's easier to get started in a market you can easily drive to.

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    4y

    In the immediate future I would get ready for a lot of inquiries in your inbox on how a lot of people think you should spend your $100k. 

    5Reply
  • Gerald Amasol
    Investor · Kapolei, HI · Member since 2020 · 18 posts · 15 votes
    4y

    One thing that helped us was reaching out to a lender and getting a prequal letter.  Much easier to start making plans when you know what numbers you're working with.  Even better when the lender is also an investor.  They start giving you different scenarios to think about when they can see your numbers as well.  

    0Reply
  • Bobby FeinmanBusiness Member
    Lender · VA Beach, VA · Member since 2019 · 914 posts · 91 votes
    4y

    Antonia...lots of great answers to your post on here, all of which are based on investing in one specific property. Another route to consider is investing the 100k in a mortgage fund that invests in real estate, earning 8-12% annually. Your investment is spread over many different properties rather than "all the eggs in one basket" 

    Bobby

    [email protected]757-222-5937
    0Reply
  • Manuel Salce
    Real Estate Agent · Monroe, CT · Member since 2018 · 63 posts · 21 votes
    4y

    I would look at house hacking in NYC. I just moved out of NYC a year ago. It's one of the most secure appreciation market places in the world in my opinion. I love the riverdale area, the median home price would double if it was located in another borough. I think multifamilies in that area are undervalued.

    0Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    4y

    @Antonia Hyman

    Buy a multifamily in a B class area that could use a small value add. Don’t take in too much risk and buy a property with updated mechanicals.

    If the value add is on the cosmetic side you can control your risk and still force appreciation and get rent values up.

    Stay away from high risk investing like C class and or large renovations for your first deal.

    Irish Jones Realty4.947 Reviews
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    1Reply
  • Antonia Hyman
    OP
    New to Real Estate · NY · Member since 2019 · 7 posts · 9 votes
    4y
    Thank you everyone. This was incredibly helpful. I'm interested in multifamilies in CT or PA, so I'll do some follow up.
    2Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    I would leverage that cash and put down payments on as many rentals as I can. Depends on your market of course 

    0Reply
  • Ben Lin
    Member since 2021 · 53 posts · 34 votes
    4y

    Hi @Antonia Hyman,

    I would buy in Philadelphia. Philly is the 6th borough of NYC anyway, LOL.

    You'd need a good agent to guide you in Philly because just like NYC one block can be a night and day situation. I would focus on gentrifying neighborhoods like University City area up to some parts of West Philly. University City area will surely keep gentrifying for the next few years because the area is anchored by two big universities (one of them is UPENN). UPENN also has a home buying program for their staff where they will pay closing costs and help them with a forgivable down payment loan.

    In Philly your 100K can buy a nice duplex or triplex that will cash flow and appreciate nicely if you find the right property. I am not sure what other investors think of Philly but for me Philly market is one of the rarest markets in the US that can generate satisfactory cash flow and appreciation at the same time, if you buy in the right neighborhoods.

    Lastly do what works best for you. You know your situations best. For example I dont feel comfortable buying in rural areas or in the burbs.  I just love cities. So that's where I will invest my money. Just make sure you crunch the numbers a thousand times before you commit to buying anything. 

    Good luck to you. 

    0Reply
  • Sheryl Sitman
    Rental Property Investor · Philadelphia, PA · Member since 2015 · 478 posts · 362 votes
    4y

    I am a fulltime investor in several areas including Philadelphia. If you wantvto buy for $100k cash the info people offer here is not accurate. All in at 100k in Philly today will land you in a sfh in a high risk neighborhood with a tough tenant pool.  There are few worthwhile markets in which you can do much with this amt.  You need a strategy/ goals and then to figure out what you can do with the funds you have. Be careful about buying a single old property in a low income neighborhood as a newbie. It can end up costing you dearly.

    1Reply
  • Ben Lin
    Member since 2021 · 53 posts · 34 votes
    4y
    Quote from @Ben Lin:

    Hi @Antonia Hyman,

    I would buy in Philadelphia. Philly is the 6th borough of NYC anyway, LOL.

    You'd need a good agent to guide you in Philly because just like NYC one block can be a night and day situation. I would focus on gentrifying neighborhoods like University City area up to some parts of West Philly. University City area will surely keep gentrifying for the next few years because the area is anchored by two big universities (one of them is UPENN). UPENN also has a home buying program for their staff where they will pay closing costs and help them with a forgivable down payment loan.

    In Philly your 100K can buy a nice duplex or triplex that will cash flow and appreciate nicely if you find the right property. I am not sure what other investors think of Philly but for me Philly market is one of the rarest markets in the US that can generate satisfactory cash flow and appreciation at the same time, if you buy in the right neighborhoods.

    Lastly do what works best for you. You know your situations best. For example I dont feel comfortable buying in rural areas or in the burbs.  I just love cities. So that's where I will invest my money. Just make sure you crunch the numbers a thousand times before you commit to buying anything. 

    Good luck to you. 

    I think I didnt make myself clear. My bad. I was talking about 100K as a down payment, not a cash purchase at 100K. To get a nice duplex/ triplex that will cash flow you need to buy something around 400 or 500K. OFC I agree 100K homes are located in a very high risk area.

    0Reply
  • Bogdan Constantin Stefanide
    Realtor · Norwalk, CT · Member since 2016 · 203 posts · 69 votes
    4y
    Quote from @Antonia Hyman:
    Thank you everyone. This was incredibly helpful. I'm interested in multifamilies in CT or PA, so I'll do some follow up.
    Would be tough to find Multies for $100K in this market in CT, to be close to NYC
    0Reply
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