How would you invest $100k?

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How would you invest $100k?

Laurie Palagyi
Rental Property Investor · Portland, ME · Member since 2018 · 5 posts · 6 votes

I sold my house this spring and have $100k to invest. I'm looking for ideas from seasoned investors on how to best invest this capital.

I live in Portland, Maine. The housing market is high and bidding wars over properties are common. I'm open to multi units, development, flips, etc.

Goal: My goal is to have this money invested in ways to bring cash flow and retire from my job in five years.

Additionally, does anyone know of a lender for multi units that offer 3.5%-15% down for non-owner occ?

Thanks!

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y
Quote from @Eliott Elias:

Put down payments on 3 flips and use the rest to set up draws for your rehab 


 Unless your market is different, with the high interest rates, now isn't the best time to flip.  houses are going to be harder to sell and prices will come down a bit in the short term.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y

    Small to midsized Self storage. If you're willing to put in the work there's still a lot of opportunity. I'd be willing to bet your area in Maine is a fairly blue ocean, at least compared to the rest of the country. Retiring in 5 years starting with $100k is possible, but it's going to take a lot of work.

    1Reply
  • Laurie Palagyi
    OP
    Rental Property Investor · Portland, ME · Member since 2018 · 5 posts · 6 votes
    4y

    Thanks Taylor! Do you have more info on investing in self storage units? 

    2Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    Put down payments on 3 flips and use the rest to set up draws for your rehab 

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    You can look to invest in a less expensive area.  How much money can you borrow from the bank?  Use that $100K to buy two single family houses or duplexes.

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y
    Quote from @Eliott Elias:

    Put down payments on 3 flips and use the rest to set up draws for your rehab 


     Unless your market is different, with the high interest rates, now isn't the best time to flip.  houses are going to be harder to sell and prices will come down a bit in the short term.

    5Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    4y

    Buy a distressed property for $75-85K cash, use the rest for rehab, and increase the value to $____ . Refinance said property later this year or early next year depending on interest rates and strategy. If you can buy/hold and cash flow in a good neighborhood you win long term. This applies to short or long term rentals. 

    Flipping (short game) is risky due to our economic climate. An estimated ARV could shift wildly when you go to sell. We can't predict the future but you can predict rental income. Rental demand should increase if less people can buy.

    4Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    I would wait until this economy decides what it is going to do and then buy (3) very distressed properties, fix them up and turn them into STRs (assuming they are in a good vacation neighborhood)

    2Reply
  • John Cassel
    Rental Property Investor · York, PA · Member since 2017 · 58 posts · 41 votes
    4y
    If you are willing to live in one unit, investing in a 3-4 unit property as a house hack will almost certainly get you out of your job the soonest.  Most local lenders should be able to do 3-3.5%.  Here are some great benefits of MF house hacking.

    -Get in with low money down
    -Can slowly rehab the worst unit as you live in it
    -It should eliminate all your living costs - other 2 or 3 tenants should cover the mortgage and all the utilities no problem.
    -Saving living costs will allow you to get into your next property even sooner
    -When you are ready to move out, the property should cashflow and you can just hold it at that point

    When on the journey to Financial Freedom/Quitting your day job, it is always easier to just increase income instead of lowering expenses because most of the big ticket expenses are necessities.  However, if you are house hacking you CAN eliminate the biggest living expenses.

    So if your monthly expenses right now are $4,000, you would need cash flow above and beyond that to become financially free.  If you start with a house hack, you could eliminate probably 50-70% of your living expenses.  Then maybe you only need $1,500-$2,000 in monthly cash flow to quit your job.  

    Hope this helps!  I did a webinar on house hacking a multifamily property so if that would help you, message me and I can send it to you.
    Sincerely,
    John
    4Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Laurie Palagyi:

    I sold my house this spring and have $100k to invest. I'm looking for ideas from seasoned investors on how to best invest this capital.

    I live in Portland, Maine. The housing market is high and bidding wars over properties are common. I'm open to multi units, development, flips, etc.

    Goal: My goal is to have this money invested in ways to bring cash flow and retire from my job in five years.

    Additionally, does anyone know of a lender for multi units that offer 3.5%-15% down for non-owner occ?

    Thanks!


     Hi Laurie, 

    I can send you a list of local lenders we use here in Ohio if you want to send me your email. I think you should consider looking OOS. I recommend the major cities in Ohio:

    -Columbus, great for appreciation, pp is a bit higher around $220k for multifamily

    -Cincinnati, has a mix of cash flow and appreciation, average multifamily around $180k

    -Cleveland, has alot of cashflow potential, average multiform around $140k

    There are other smaller markets like Dayton, Akron, and and Newark, which we are starting to see these areas boom due to huge investors and corporations like Intel choosing to set up shop in these kind of areas.

    Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.

    Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!

    I would start running numbers on all the potential areas you want to invest in. See where you money can go the furthest. I like to use this calculator https://www.calculator.net/ren.... 

    5Reply
  • Conner Olsen
    Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
    4y

    @Laurie Palagyi To answer your question, I've never heard of a lender going less than 15% down for investor loans. Banks want to mitigate risk and if you are not living in the property it is more risky to them. If you are an investor and you have financial troubles and can't pay all your mortgages, you will probably let the bank take your rentals before they take your primary residence so the higher down payment is one way they mitigate that risk. Seller financing is the best way to purchase non owner occupied properties with less than 15% down. Hope that helps!

    1Reply
  • Ricardo Hidalgo
    Real Estate Agent · Member since 2019 · 569 posts · 257 votes
    4y
    Quote from @Laurie Palagyi:

    I sold my house this spring and have $100k to invest. I'm looking for ideas from seasoned investors on how to best invest this capital.

    I live in Portland, Maine. The housing market is high and bidding wars over properties are common. I'm open to multi units, development, flips, etc.

    Goal: My goal is to have this money invested in ways to bring cash flow and retire from my job in five years.

    Additionally, does anyone know of a lender for multi units that offer 3.5%-15% down for non-owner occ?

    Thanks!


     I would grow the capital for the time being and focus on flipping. If a property cash flows really good perhaps keep it but I believe moving capital and learning the entire process helps with understanding and choosing better deals for the future. 

    0Reply
  • Sergey A. Petrov
    Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
    4y

    $100k buys you $500k worth of real estate. You decide which you prefer- STR, MTR, LTR, residential, commercial, self storage, etc. I am not sure that $100k gets you to retirement in 5 years but for all I know, you are retiring with a great pension or have a sizable 401k/other retirement fund. Or maybe you retire to a destination where the cost of living is very low.

    1Reply
  • Alex Talcott
    Attorney · Durham, NH · Member since 2019 · 292 posts · 126 votes
    4y

    2 Limited Partner investments in syndications

    0Reply
  • Joshua Stanton
    Member since 2022 · 8 posts · 4 votes
    4y

    Purchase a home using the All In One Loan. It’s a first lien equity line that can function as your own personal bank. You can borrow money from yourself to purchase more homes and pay off the mortgage debt at the same time. It’s more more complex than this simple answer but let me know if you’re interested in a longer conversation. 

    0Reply
  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    4y
    Quote from @Laurie Palagyi:

    I sold my house this spring and have $100k to invest. I'm looking for ideas from seasoned investors on how to best invest this capital.

    I live in Portland, Maine. The housing market is high and bidding wars over properties are common. I'm open to multi units, development, flips, etc.

    Goal: My goal is to have this money invested in ways to bring cash flow and retire from my job in five years.

    Additionally, does anyone know of a lender for multi units that offer 3.5%-15% down for non-owner occ?

    Thanks!


     Asking such a question in such a wide-open manner with 0 focus is no different then saying; "I'm going to Vegas, $100k in hand, want to make $, what do I play and where do I do it?". 

    I don't understand these type posts asking for others to instruct exactly what to do, where, how, with whom, in short not even a treasure map but more a step-by-step "franchise" style assembly chart for how to become a REI bazillionaire....

    It simply does NOT work that way. That action plan is what I would call the #1 way to LOOSE $ in REI.

    I suggest maybe taking a step back and re-framing everything. Where this is asking, essentially everything, maybe put all you need to sort on a white board and put it in order. 

    What you will need to answer to get into a deal is: Who, What, When, Where, Why, How. And in that order. 

    Step 1, WHO. Who is doing this REI? Is it you, yourself personally? Your LLC? Your Trust? Your S-Corp? Your WY s-corp operating through a domestic LLC started by foreign s-corp for operations in that state? Step 1, WHO?

    4Reply
  • Nicholas GlatterPro Member
    Investor · Tampa FL, USA · Member since 2019 · 72 posts · 20 votes
    4y

    @Laurie Palagyi

    You really could do a lot with 100k disposable income.

    You could put 20% down in low home value areas with good cash flow. Now the home appreciation wouldn’t make you rich but you would have cash to save, reinvest and repeat until you have enough homes to retire with. Look at what $ amount you need monthly to retire and then work backwards.

    You could also use the money to again buy lower valued homes in good neighborhoods and flip the house for a prophet but this would be a little riskier as your numbers could come out costing rather than making you money.

    Invest with someone who needs cash and partner on deals, preferable those with a good success rate. This would take time but it’s mostly hands off for you and you could repeat the process for equity or % of sale in those properties.

    I hope that helped spark some ideas! Here to help if you’d like to talk!

    0Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    4y

    OK all you little mortals.

    Sit down in a circle around me and let Uncle Jerryll tells yous what Uncle Jerrylls woulds doos.

    Are you all paying attention? Good here goes..

    Hmm how to begin.. let's see...here is what I would do.

    Instead of doing what most of the people here advise you to do... bless their lil hearts for trying to help a fellow man.. good on you all! Love and respect to you ♥♥♥

    Consider this:

    ("buy 3 tunas, so you can eat for 3 weeks"... VS. "buy a fishing pole, and 5 years worth of bait and a handbook on "how to fish", so you can forever get more tuna".

    Wait wait wait... don't applaude yet... hold on. Let me explain so the applause will be way bigger in the end. Easy SeaBiscuits!

    Be smart.

    Invest that $100K, into a proper lead generation system. Think bigger. Think "sustainability". Lucky for you , you have $100K to invest. I had $5K to invest when I started and that money went away before I got my first deal under contract.

    Now...

    Here is what not only I would do.. here is what I ACTUALLY DID:

    1) invest in a website. [$100/month] for hosting [$1000 - $5000 for website design.. well I didn't pay anyone for any of this. I had no money... I had to do this all myself...]

    2) Make that website credible. [$0]

    3) Focus on Credibility [$0]

    4) Know the difference between "lead generation" and "MOTIVATED seller lead generation. [$0]

    5) Understand motivated sellers, so your marketing message resonates with them. [$0]

    6) Yup you guessed it. Market for motivated sellers, not just "leads" using PPC and Facebook ads (I didn't do this step.. I did DMM per advise by members of this "wonderful" board. Although much appreciated the genuine attempt to help me, it was the biggest mistake I made in my career as an investor. [$2000 - $3000 /month]

    7) Drive said paid traffic to your credible website WHILE you focus on SEO (to start generating free actually motivated seller leads)

    8) In about 3 weeks to 1.5 months you should see a steady flow of leads coming in

    9) If you did a good job with your ad targeting, these leads should make you about $20K to $30K the first few months

    10) Now you hire an acquisitions manager and a receptionist [$4K to $7K/month] but you don't feel it because you are making about $20K/month

    11) With these people in place, now you can scale to double the deal flow, so you are now at $40K to $60K/month

    12) Now you triple your marketing budget

    13) Scale income even more.

    14) 3 to 5 months have passed since you started this and suddenly your first organic leads start to flow in.

    15) Now your profit/lead has doubled (organic leads are WAY better than paid leads)

    16) Now within 6 months you now make $100K+?month starting with just $100K period... and the total money invested of that initial $100K is less than $20K.

    Easier said than done? Sure, absolutely. But impossible? Absolutely not. I did it.. and now...

    We do anywhere between $40K and $80K/Week... (with just ONE of our businesses.)

    That's just me though. Most of you little Yoomanz however are too scared to be patient and look at the bigger picture especially when you do not see immediate results with every cent you spent.

    But think strategically and you will go far!

    OK you all can applaud now!

    Thank you thank you. 

    Questions?

    Uncle MSOOTKAUG has spoken!

    1Reply
  • Bethany TuronPro Member
    Property Manager · Durham, ME · Member since 2019 · 179 posts · 102 votes
    4y
    Quote from @Laurie Palagyi:

    I sold my house this spring and have $100k to invest. I'm looking for ideas from seasoned investors on how to best invest this capital.

    I live in Portland, Maine. The housing market is high and bidding wars over properties are common. I'm open to multi units, development, flips, etc.

    Goal: My goal is to have this money invested in ways to bring cash flow and retire from my job in five years.

    Additionally, does anyone know of a lender for multi units that offer 3.5%-15% down for non-owner occ?

    Thanks!


     There are great cash flow options available to you outside of Portland.  Sanford, Lewiston / Auburn, Gardiner, Augusta, Waterville, to name a few.  I have a lender who does 15% for single family investment properties, otherwise you're stuck at 20% for 5+ units and 25% for 2-4 units.

    0Reply
  • Shawn Stone
    Specialist · Tarrant County, TX · Member since 2018 · 17 posts · 12 votes
    4y

    I'd likely start a couple of BRRRR projects with half/two thirds and hold some cash until those were stabilized. Then I'd likely use the balance to fund a brokerage account, purchase a couple hundred shares of high-volume, respectable-yield stocks, and write covered calls to augment the returns. :)

    0Reply
  • William Coet
    Lititz, PA · Member since 2013 · 595 posts · 272 votes
    4y

    @Jerryll Noorden  Can you explain what you are doing with the leads?  Are you a wholesaler or doing flips?

    0Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y
    Quote from @Theresa Harris:
    Quote from @Eliott Elias:

    Put down payments on 3 flips and use the rest to set up draws for your rehab 


     Unless your market is different, with the high interest rates, now isn't the best time to flip.  houses are going to be harder to sell and prices will come down a bit in the short term.

    Their not tough to sell if you buy right and sell right. 
    0Reply
  • Mac Elaina
    Real Estate Agent · Memphis, TN · Member since 2020 · 9 posts · 2 votes
    4y

    @Laurie Palagyi Memphis is a great market. Let’s connect.

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    House hack a 4 plex!

    1Reply
  • Lk Spencer
    Investor · Bronx, NY · Member since 2013 · 9 posts · 1 vote
    4y

    @Theresa Harris where would you do flips.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    @Laurie Palagyi

    Start with getting adequate knowledge of real estate and strategies you are planning to apply in investing, then select a niche.

    Also explore various financing and partnering options and do a thorough local market research and analysis.

    You can start by joining local real estate clubs, attending meetups and connecting with local agents and investors.

    A local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better, they also have a team of real estate professionals like Contractors, Appraisers, lenders, Property managers etc. to execute the strategy more efficiently.

    All the best!

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