what to do with 50K

Question

I want to start investinbg in real estate, My capital is 50K, I need ideas on how to make this money grow quicky in real estate in todays market.

thanks

Account Closed · Answer

1. When you try to make money quickly in  RE you generally will lose more often than succeed. What is the rush?

2. $50K in the Bay Area is closer to closing costs than anything else. In some parts of the Midwest and other states back east you can buy 2 for cash.

3. Flipping is fine but it normally works best when you are local to the property. You find the bargains from investing time and then sell them on. Some people do flip at a distance but mostly when they sell local property (local to them) to remote investors.

4. Forget comparing yourself to the other person. Maybe they were lucky. Maybe they were on the 100th deal. Maybe they have skills you do not have. Maybe you can do a lot better.

It really does not matter what they did. What matters is what you can do based on your present skills, ability to manage risk and other factors. Create goals for yourself but stick to what works for you and  then grow your ability.

I made 1,000% over 22 months. It was more of an accident than planned as I could not have predicted the market over the period. I know that I selected a good property but there was no way I could have predicted the appreciation rate. The return was largely connected to having 10 to 1 leverage (without debt in this case). It was a significant sum but I do not expect every deal to work as well.

Right now I am working with some other investors where they should be able to double their money in a year ($60K investment). Time will tell as there are no guarantees. Mostly buy, fix and sell or refinance type of deals. Something I have experience with but there is no way to really predict. Given the way the deals are structured the percentage gain will be pretty impressive but that can be manipulated (multiple a small number and the percentage sounds great but the total dollars produced is less interesting).

Bottom line? Be very careful about the goal. Focus on doing deals you understand. Your returns will grow as you grow your knowledge.

John Corey

PS. Having a RE license will very likely hurt your returns and expose you to more legal liability. It will also be a waste of time compared to just focusing on what you need for investing rather than to work with the public as an agent.

N/A N/A · Answer

thank you for your responses,
I live in SF Bay area in CA, but even REO are expensive around here, I also expecting the Nevada Salesperson Real Esate license to do transacions there. So I am able to go around direrent place to find good deals. I would like to get a high return anually, but I do not know if in this market is still posible to do it. I know of someone who was flippling house3 yrs ago and got a return of 144% in one year. 
I really want to see if I can at least double my investment in one year, if I could, which will be the best place to do it?
Im willing to invest the whole amount.

Thanks, 
  
my credit is good
the 50k is liquid money

Mikey Kay · Answer

Define quick? Are you looking to spend all 50?

You can flip a house? You can buy a house and rent it out (depending on the cash flow you can make a decent amount of money)?