Greenwich, CT · Member since 2015 · 1 post · 0 votes
Hi all,
I have 200k in cash and I want to put them to work for me. Both my wife and I are working full time, making decent money, and we want to find an investment(s) to generate some decent risk adjusted returns. What do we want from our investments:
1) Be silent partners or require minimum time spent (few hours per week in weekends)
2) Generate a return higher than 10%
3) Don't have any preferences for investment types as long as 1) and 2) are met
4) We live in one of the most expensive real-estate markets in the country, so $200k doesn't buy that much in here (to give you an idea, our 4 bdrm 3 baths is like $850)
@Calin Crisan if I had the cash that you have I would invest it with down payments on multi-family residences with high returns. Good turn key properties with a property manager in place is a passive way to go with little time to invest in. @James Wise is a good person to connect with and get his opinion.
@Calin Crisan Easy. Invest in Michigan and you can probably retire in a few years...or at least have all of your monthly bills paid for from your cash flow. 200k is huge. I'm working with someone now that started with 300k. You should see the smile on his face.
Not all markets can do this though. You mentioned your own market as one, CA is another. Those markets with very high property values are really hard to cash flow. You can make large profits, but you would have a very hard time cash flowing a property that costs over $200k unless you still had a lot of your own money (cash) in it...and that's not really cash flowing since you are starting with a lot of cash in it.
Here in MI, and many midwest states, you can take the profits and buy/rehab complete (the same house you flipped in the higher priced market)...and cash flow big time.
Like I said above, it's easy...if you are in the right market.
First of all, I suggest not openly posting how much cash you had to invest in the forums. It's just calling out for unsolicited attention if you know what I mean.
Based on your criteria above, there are two basic options you may want to consider:
PRIVATE MONEY LENDING -- you can be the lender and lend your cash to rehabbers/flipper who require to cash to acquire, rehab and flip their properties. This typically earns you anywhere from 8% to 12%. We have a similar program with a 15% return (plus a bonus 2% in points on the back end). These loans are most often secured by a first lien position on the property and are usually short term (i.e. 4 to 6 months), but you can keep your cash invested for as long as you desire.
INCOME PROPERTIES -- If you're looking to build a small portfolio of cash-flow properties for passive income, then you may want to purchase some turnkey investment properties in prudent markets that make sense. This is what I started doing over 11 years ago and is the best wealth building strategy. Returns will vary by market and property type, but you can expect leveraged cash-on-cash returns from about 15% to 25%. (Your total ROI would be higher.)