Where can I earn 7% with $1m+ paying all cash?

Question

I’m interested in investing $1.4m in cash, aiming to earn 7% after expenses per year. I’m interested in new or recent construction in nicer neighborhoods. Is it possible to make $8k/mo (roughly 7%) after expenses when investing that amount of money? I’m not interested in taking loans. I’m single, and I’m doing this so I can quit my job, live in a LCL area, and focus on starting a business.

Chris Seveney · Answer

If you are looking for income/cash flow over appreciation then you are better off private lending or investing in a debt fund or another type of fund that is structured for pure cash flow over appreciation.

I could give you the name of 5+ debt funds where you could get 8-10% plus some offer preferred tax advantages (dividend over ordinary income).

Bryce Jamison · Answer

You could be a hard money lender and lend at 10+%. If the people you loan to default you get the property. Real estate meetups are a great place to meet people looking for hard money lenders.

How old are you? If you stuck the money under a mattress pulling 8K out a month you'll be set for 15 years. If you put it in CDs or a money market it'll last a little longer. Mix in eventual social security (maybe), and any other retirement you have saved and you may be set already.

I live in Alamance County NC. I can show you plenty of single family houses in the 300K range that will rent long term for $1,800-2,000. That's not 8%, especially after expenses, but you could make offers at a price where it would be until you find someone to accept.

Marcus Auerbach · Answer

Don't do anything that does not interest you just because the ROI looks good. If you buy rental properties without being interested in being an owner you will hate it!

7% is pretty easy, leverage you make more and if you choose wisely you dept pay down and your appreciation will exceed your cash on cash return quite a bit

Mike Day · Answer

In Indianapolis, those returns are not realistic on newer construction in nicer neighborhoods. Even on older multifamily in borderline neighborhoods, 7% after expenses is high. If you are hell-bent on getting that return, you could manage it yourself or make these value-add projects.

Mike Klarman · Answer

So, if you go to the midwest.  You can buy for cash properties that are 75k - 100k, you'll put enough in them to be rent ready maybe 50k - 60k depending.  So now each house is worth 150k - 200k.  The rent on them will be 1200 - 1500 per month.  By my count 1.4 million could get you about 9 - 10 of them.  You'd have your 1.4 million invested in RE and essentially making around 10k in cashflow per month, plus to have your money parked in an appreciating asset and as your asset increases in value so will your cashflow.

With that kind of cash you need to be buying at auction.  You'll get a 20% - 40% discount on price.  That 200k house on market is 120k - 150k at auction.  I have a contact who is an expert at the Pitt auction scene.  He's letting me piggyback on his knowledge as he only picks up one per month and there's more opportunity than that.  Last year, he bought a house for 35k that he sold to an investor client of his for 105k without lifting a hammer.  The investor went to a HML and got a loan, the appraisal came in 330k.  It did need 100k in work, but still.  Imagine buying that for 35k, putting 100k into it and not taking a mortgage.  The rent is 2500/month and at anytime you can take a 135k mortgage just to get your money back and still cashflow very well.

Priyanka Verma · Answer

Hey Shane,

Yes, it's possible to earn around 7% ($8k/month) on a $1.4M all-cash investment, but it depends heavily on where and what you buy. You’ll likely need to look in strong cash-flowing markets like parts of the Midwest or Southeast think Indianapolis, Memphis, or Birmingham where cap rates are higher and expenses are more manageable.

To truly net 7% after property management, taxes, insurance, and maintenance, you'll need properties with at least 7.5–8% cap rates. Newer duplexes or small multifamily units in good neighborhoods can help reduce risk and maintenance costs. Just note, newer builds may have lower returns, so it's a balance.

Also, watch for rising property taxes and insurance they can eat into your profits quickly. If you stay disciplined in your deal analysis and market research, this goal is doable, especially if you're planning to live in a low-cost area and keep your lifestyle lean.

Thanks

Shane Finnegan · Answer

@Priyanka Verma The main challenge is that I'll only have 45 days to identify a property or properties because I'm doing a 1031 exchange. What do you think of Tennessee and Ohio as options?

Tenzapa Wakombe · Answer

You’re in a great position with $1.4M cash and a clear goal. Hitting ~$8K/month (7% net) without leverage is possible, but it’ll likely require STRs or small multifamily in strong rental markets.

Newer construction in A-class areas usually comes with lower cap rates, so you may need to look at B+ areas in emerging or LCL markets to hit that return. A diversified portfolio—like newer duplexes or build-to-rent homes—might get you closer to your target with less hassle.

Would love to hear which markets you’re eyeing—happy to trade ideas!

Sylvia M Graves · Answer

@Shane Finnegan

Hey Shane —

I’m Sylvia, cofounder of a real estate investment firm focused on strong cash-flowing multifamily in stable southern markets. We’re currently working on a 220-unit deal in an LCL area with a projected 7%+ cash-on-cash return and zero leverage. If you’re serious about hitting that 7% goal, I’d be happy to connect and walk you through it.

Let me know if you’d like to chat!

Ryan Rominger · Answer

Hitting ~7% net on $1.4M without leverage is doable, but you’ll need to be intentional about the market and asset class. Newer construction in strong neighborhoods tends to offer lower maintenance and more reliable tenants, but it also usually means tighter yields. To get closer to $8K/month net, some investors mix in well-located B-class properties that don’t need major work but still generate solid cash flow.

Just something to keep in mind: even with all-cash, expenses like taxes, insurance, vacancy, and turns add up quickly. That’s why having a good handle on local rents, ongoing costs, and tenant demand is key — especially if you’re planning to live elsewhere and need things to run smoothly.

If you're looking at markets like Indy or others in the Midwest/South, it's worth modeling out a few sample properties to see how they stack up before committing.

Where can I earn 7% with $1m+ paying all cash?

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