Investment strategy: $500k liquid?
Bolingbrook, IL · Member since 2017 · 16 posts · 7 votes
Investment strategy: $500k liquid?
Most Popular Reply
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3yQuote from @Kashif Khan:
Thank you everyone for your comments and feedback. I continue to explore options and will hopefully keep this thread posted on the progress.
Continue to do what got you the $500k in the first place.
Search for the hundreds of other 'I have $× what should I do' threads.
Bonus if the poster provides no info on where they're at as far as debt, family, retirement, goals, what they like and what they're good at etc. GIGO.
43 Replies
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@Kashif Khan
There are many options out there so I would make sure you do a very thorough job on due diligence on who you partner with.
Make sure they have significant experience and provide you with past performance.
Also recommend getting from them their reporting procedures and sample financial reports. If they cannot provide them that’s a red flag
Last but not least have a background check done on them.
7e investments53 Reviews - Investor/Syndicator · North Aurora, IL · Member since 2013 · 167 posts · 70 votes3y
Connect with all the local meetups in Chicagoland. There is no right or wrong way. The most important trait is action. Remember the proverb "When is the best time to plant a tree" and make that your NorthStar. You will never know enough or be totally ready. BUT almost everyone who stays in the game long enough will move to multfamily for many reasons. My suggestion is start there either through syndication or if active.... start small and grow exponentially. ie start with a 4plex and if you add a new asset every 90 days you will do 4/5 deals in a year and own 124 units. Stay as close to home as possible and self manage the first couple deals if you can. But you are in a great area to invest.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes3y
Quote from @Kashif Khan:
Hello BP members, I am new here and have been an infrequent visitor on bp over the last 4 years or so. I currently do not own any income properties but planning to take a plunge very soon. Here for advice, guidance and consultation.
Looking to invest up to $500k liquid to generate income, not restricted to any area/region - personal preference would be Chicago suburbs.
How do I best leverage my capital for cash flow? What would the seasoned and highly experienced investor do with $500k today? I am exploring various ooptions such as apartment buildings, single family homes, multi family homes, multiple condo units, reits.
I am not sure which route I will take yet. Any advice will be helpful.
Buy rentals with 10% or so net caps,
- Bolingbrook, IL · Member since 2017 · 16 posts · 7 votes3y
Thank you everyone for your comments and feedback. I continue to explore options and will hopefully keep this thread posted on the progress.
- Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes3y
@Kashif Khan if you are going to invest here in Chicago, then I would probably tell you to focus in on apartments. The single family home and condo market are very over heated, and you as an investor, will not get the yield you are looking for there. At least with apartments, the interest rates are having a small impact on pricing and there is some softness in some areas. Inventory is still so low though.
I would also not look to deploy the entire 500k at once. You obviously know what you are doing in life to have stockpiled some cash, so I wouldn't go find a partner to invest it all with. Maybe try a few deals out and see how you like working with different folks. I would also recommend that you do NOT go looking for 10 caps. Most of those are in the very worst neighborhoods you can find.
- 3yJacob ValleBusiness MemberReal Estate Agent · Ottawa, IL · Member since 2020 · 33 posts · 13 votes
@Kashif Khan Welcome to the world of real estate investing! As you look through the forums and online, you will find that there are countless ways to invest in real estate or to shape a deal. Because that can be overwhelming at times, I think the best way to succeed is to surround yourself with your own "team". This team could include a mentor, a mortgage broker, a real estate agent, a contractor, and a property manager. Together, in consultation with your team, you will find a confident path forward for a successful journey investing in real estate.
Feel free to reach out to me if I can be of any further help. Here in Ottawa, IL, we have all kinds of opportunities to invest in real estate, including new construction properties.
- 3ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Hi Kashif, Cincinnati may be of interest to you! Lots of SMF, LMF, SFH. Lower purchase price with opportunities for appreciation friendly and cash flowing areas. Won't hurt to at least look! Let me know what you think!
Sam McCormack Realtor - Investor · Batavia, IL · Member since 2014 · 99 posts · 81 votes3y
Kashif,
Congrats on your decision to consider Real Estate as an investment. Some good inputs here. I own and operate multifamily throughout Batavia, Aurora and Montgomery. This is hands-on active investing from over the last 15yrs. I also invest passively outside our market into AZ,TX, and the Midwest via Syndication.
Through Syndication you can leverage the expertise of others to provide excellent returns in the 10% range. This is passive investing as a Limited Partner in real estate.
We can see experience in Assets Under Management (AUM) or the number of full-cycle transactions (acquisition to exit) showcasing operational expertise and the outcome in ROI to investors.
Operational expertise in passive real estate investing is the ability of the operator to acquire the asset and execute the plan and increase the value of an asset through strategic execution. The approach generally includes fixing the expenses (cash going out) and improving the rents (cash coming in).
I see you are local- glad to share experiences, resources and connections.
Regards,
Joe
- Real Estate Agent · Columbus, OH · Member since 2019 · 292 posts · 364 votes3y
Quote from @Chris Seveney:
@Kashif Khan
There are many options out there so I would make sure you do a very thorough job on due diligence on who you partner with.
Make sure they have significant experience and provide you with past performance.
Also recommend getting from them their reporting procedures and sample financial reports. If they cannot provide them that’s a red flag
Last but not least have a background check done on them.
Hello and welcome to BP Kashif! It's great to have you here. Here are some suggestions for your consideration:
- Define your investment goals: Before diving into any specific property type, it's essential to clearly define your investment goals. Are you looking for long-term cash flow, short-term appreciation, or a combination of both? This will help guide your decision-making process.
- Research the Chicago suburbs market: Since you mentioned a personal preference for Chicago suburbs, it's crucial to thoroughly research the local real estate market. Look for areas with strong rental demand, low vacancy rates, and potential for future growth. Consider factors such as job growth, proximity to amenities, and school districts.
- Explore different property types: As you mentioned, there are various property types to consider. Each has its own pros and cons. Apartment buildings can offer economies of scale and multiple income streams, while single-family homes provide more straightforward management. Multi-family homes and condo units can offer a balance between the two. REITs offer diversification and passive income but lack direct control.
- Conduct thorough due diligence: Regardless of the property type, conducting thorough due diligence is crucial. Evaluate the property's condition, potential rental income, expenses, and market trends. Consider working with a real estate agent or property inspector who specializes in investment properties to help you make informed decisions.
- Network with experienced investors: Engage with seasoned and experienced investors in the Chicago suburbs area. Attend local real estate investment clubs or networking events to learn from their experiences and gain insights into the local market. Building relationships with successful investors can provide valuable guidance and potential partnership opportunities.
- Consider leveraging financing options: With a substantial amount of liquid capital, you may want to explore leveraging financing options. Speak with lenders to understand the mortgage rates, terms, and eligibility criteria. By leveraging debt, you can maximize your cash-on-cash return and potentially acquire multiple properties.
- Diversify your portfolio: Consider diversifying your investment portfolio by spreading your capital across different property types or locations. This can help mitigate risks associated with market fluctuations or changes in specific neighborhoods.
Hope this helps and let me know if you'd be interested in the Midwest! I invest locally in the Columbus Ohio market. Best of luck and feel free to ask any specific questions you may have along the way.
- 3yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Kashif Khan:
Hello BP members, I am new here and have been an infrequent visitor on bp over the last 4 years or so. I currently do not own any income properties but planning to take a plunge very soon. Here for advice, guidance and consultation.
Looking to invest up to $500k liquid to generate income, not restricted to any area/region - personal preference would be Chicago suburbs.
How do I best leverage my capital for cash flow? What would the seasoned and highly experienced investor do with $500k today? I am exploring various ooptions such as apartment buildings, single family homes, multi family homes, multiple condo units, reits.
I am not sure which route I will take yet. Any advice will be helpful.
Hi Kashif, you should take a look at the midwest, in particular Columbus Ohio! I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just a few weeks ago, I helped a client close on a deal getting them 20% cash on cash return. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!
Jimmy Lieu, Red 1 Realty4.9120 Reviews - 3yTony AngelosPro MemberReal Estate Agent · Member since 2019 · 192 posts · 131 votes
Hey @Kashif Khan, the answer to this is highly dependent on your individual goals and objectives. For example, you say "500k to generate income." You might want to reframe that goal to say like " Generate $5,000/mo net cash flow and I have 500k liquid."
From the very simplest of options, toss it in a REIT and it's 100% hands off; the other extreme is trying to BRRRR the entire thing. One is totally passive, the other is basically a full time job.
There is a sliding scale between "Profit" on one side and "Comfort" on the other, it's your job to be honest and realistic with yourself about where in that scale you fall.
For just starting out I would suggest meeting other people in the industry who are both exactly where you are and ahead of you. The first deal is always the hardest, which sometimes seasoned investors forget, and having a good support group and network is crucial.
Step 1 is definitely, without a doubt, just going to REI meetups and talking to other people about what they're experiencing, and just see what sticks with you and sounds like something you like.
There are a lot of meetups, you can also go on meetup.com and just search REI groups and you'll find plenty. I have one too at our office monthly. Lot's of people do.
Once you start to figure out your own objectives, everything else will begin to fall into place, but don't be in a rush to part with your money
- Real Estate Agent · Columbus | Toledo · Member since 2019 · 607 posts · 768 votes3y
Quote from @Kashif Khan:
Hello BP members, I am new here and have been an infrequent visitor on bp over the last 4 years or so. I currently do not own any income properties but planning to take a plunge very soon. Here for advice, guidance and consultation.
Looking to invest up to $500k liquid to generate income, not restricted to any area/region - personal preference would be Chicago suburbs.
How do I best leverage my capital for cash flow? What would the seasoned and highly experienced investor do with $500k today? I am exploring various ooptions such as apartment buildings, single family homes, multi family homes, multiple condo units, reits.
I am not sure which route I will take yet. Any advice will be helpful.
Invest in the wonderful town of Columbus, OH. Home to The Ohio State University with nearly 60,000 students, 5 fortune 500 companies, over +25% population change since 2000, 2016 smart city challenge award winner gaining 50 million dollars in funding from the government ( https://www.columbus.gov/smartcity/), Intel is spending 20 Billion dollars to build two semiconductor plants, and many many more great things presently and coming in the future. Needless to say Columbus will remain a strong real estate market for the foreseeable future
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
Quote from @Kashif Khan:
Thank you everyone for your comments and feedback. I continue to explore options and will hopefully keep this thread posted on the progress.
Continue to do what got you the $500k in the first place.
Search for the hundreds of other 'I have $× what should I do' threads.
Bonus if the poster provides no info on where they're at as far as debt, family, retirement, goals, what they like and what they're good at etc. GIGO.
- 3yMichelle BatemanPro MemberRealtor · Kansas City, MO · Member since 2019 · 108 posts · 52 votes
I feel like I always say this but I feel confident that you should identify 2 to 3 different markets, find an investor friendly agent in each of those markets and do your research, join investment groups in those markets, and then begin to narrow down which market is going to be best for your investment strategy.
It also sounds like you're not sure on your investment strategy, so during the above process, take detailed notes on what investors are doing to find success in those specific markets and use that to help guide your investment strategy.
- Columbus, OH · Member since 2023 · 427 posts · 254 votes3y
$500k provides you a lot of flexibility, I would say the first step is deciding if you want to put that all in one MF property up to $2.5mil, or if you wanna spread it across multiple assets. Also depends on your working situation- do you have the time to be hands on? Or would a property manager be better suited for you?
- Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes3y
@Kashif Khan, if you have any interest in rent-by-the-room investments in Atlanta, I'd be more than happy to connect and share my insight behind this unorthodox investment strategy. This asset class can provide high-yield cash flow, however, you do assume more risk. Feel free to shoot me a text or email to connect (contact info is listed in my bio).
- Bolingbrook, IL · Member since 2017 · 16 posts · 7 votes3y
Quote from @Michael Dumler:
@Kashif Khan, if you have any interest in rent-by-the-room investments in Atlanta, I'd be more than happy to connect and share my insight behind this unorthodox investment strategy. This asset class can provide high-yield cash flow, however, you do assume more risk. Feel free to shoot me a text or email to connect (contact info is listed in my bio).
I would love to learn more about this segment
- Bolingbrook, IL · Member since 2017 · 16 posts · 7 votes3y
Quote from @Jimmy Lieu:
Quote from @Kashif Khan:
Hello BP members, I am new here and have been an infrequent visitor on bp over the last 4 years or so. I currently do not own any income properties but planning to take a plunge very soon. Here for advice, guidance and consultation.
Looking to invest up to $500k liquid to generate income, not restricted to any area/region - personal preference would be Chicago suburbs.
How do I best leverage my capital for cash flow? What would the seasoned and highly experienced investor do with $500k today? I am exploring various ooptions such as apartment buildings, single family homes, multi family homes, multiple condo units, reits.
I am not sure which route I will take yet. Any advice will be helpful.
Hi Kashif, you should take a look at the midwest, in particular Columbus Ohio! I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. Just a few weeks ago, I helped a client close on a deal getting them 20% cash on cash return. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!
Definitely interested in learning more about the OH market. We should connect
- Bolingbrook, IL · Member since 2017 · 16 posts · 7 votes3y
Quote from @Joe Archbold:
Kashif,
Congrats on your decision to consider Real Estate as an investment. Some good inputs here. I own and operate multifamily throughout Batavia, Aurora and Montgomery. This is hands-on active investing from over the last 15yrs. I also invest passively outside our market into AZ,TX, and the Midwest via Syndication.
Through Syndication you can leverage the expertise of others to provide excellent returns in the 10% range. This is passive investing as a Limited Partner in real estate.
We can see experience in Assets Under Management (AUM) or the number of full-cycle transactions (acquisition to exit) showcasing operational expertise and the outcome in ROI to investors.
Operational expertise in passive real estate investing is the ability of the operator to acquire the asset and execute the plan and increase the value of an asset through strategic execution. The approach generally includes fixing the expenses (cash going out) and improving the rents (cash coming in).
I see you are local- glad to share experiences, resources and connections.
Regards,
Joe
Joe- thanks. We are local. I'd love to connect for a coffee or zoom call.
- Rental Property Investor · Durham, NC · Member since 2015 · 69 posts · 32 votes3y
Greetings,
I have two deals under contract,looking for private capital.
I am an experience real estate investor/landlord in the southeast ( NC and SC)
6-12 month terms @ 6-8% interest only
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes3y
Quote from @Steve Vaughan:
Quote from @Kashif Khan:
Thank you everyone for your comments and feedback. I continue to explore options and will hopefully keep this thread posted on the progress.
Continue to do what got you the $500k in the first place.
Search for the hundreds of other 'I have $× what should I do' threads.
Bonus if the poster provides no info on where they're at as far as debt, family, retirement, goals, what they like and what they're good at etc. GIGO.
bruh
- Investor · Providence, RI · Member since 2016 · 138 posts · 40 votes3y
@Kashif Khan Assuming there is no time constraints on your money, I would buy 1 or 2 small multis and see what you can do with them, give it a year or 2 and then you'll have an idea on what you're good at. Either take the rest and the saved rent and go bigger after that or, depending on the market conditions, sell it and buy what you really like.
Live and breathe it, go to meetings, talk to people, walk properties as much as you can while you're learning. Then go all in, make that big bet once you're comfortable.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Steve Vaughan:
Quote from @Kashif Khan:
Thank you everyone for your comments and feedback. I continue to explore options and will hopefully keep this thread posted on the progress.
Continue to do what got you the $500k in the first place.
Search for the hundreds of other 'I have $× what should I do' threads.
Bonus if the poster provides no info on where they're at as far as debt, family, retirement, goals, what they like and what they're good at etc. GIGO.
Regardless the poster is having $25K or $25 million to invest, I know in Biggerpocket that the best investment answer is always and always In Ohio.
Doesn't matter it's Cleveland or Columbus,OH. LOL - Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
Quote from @Carlos Ptriawan:
Columbus? Ah snap you did it now. Here come 32 agents from Reafco 🥺
- PA · Member since 2010 · 339 posts · 168 votes3y
@Kashif Khan Use the funds to be an equity partner on a small land development project.
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