60k to invest ideas?

Houston, TX · Member since 2015 · 98 posts · 24 votes

Hey everyone I've got roughly 60K to invest and I am looking for my first deal preferably in-state in Indiana. I don't have any access to credit but I would like to work on doubling my money in the next year. What would you do with it?

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Logan AllecBusiness Member

Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes

10y

If I were in Indiana, I'd start a turnkey company. But that's just me.

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Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
10y
If I were in Indiana, I'd start a turnkey company. But that's just me.
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Andrew Meyer
Investor · Bloomington, IN · Member since 2015 · 195 posts · 36 votes
10y
Are you able to work on a property yourself or what is your situation? Are you limited to 60k total or could you buy a 60k property and put some money into it each month?
I'm moving to Bloomington next week and can't wait to get together with the REIA several of the BP investors are trying to start!
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Andrew Meyer
Investor · Bloomington, IN · Member since 2015 · 195 posts · 36 votes
10y
Originally posted by @Logan Allec:

If I were in Indiana, I'd start a turnkey company. But that's just me.
You won't find much of a turnkey for 60k in Bloomington from what I've seen in the area. Now if that could be a down payment that's possible,
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
I can work on the property and already have tools from my previous construction business. Time is a bit of a limiting factor as I am getting ready to start my last semester in school. As of this moment I have access to 60K and that's it I am working on getting some other funding/financing but nothing is sure at this point. I want to put my money to work though.
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
Also, I am not limiting it just to Bloomington I will be in Indiana for at least the next couple years in Indianapolis so I don't mind branching out a bit. There isn't a whole lot of inventory out there in Bloomington right now.
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Chad CarsonPro Member
Investor · Clemson, SC · Member since 2008 · 179 posts · 156 votes
10y
I wouldn't limit myself to doubling my money in one year. If you do that great, but I think walking before you run makes sense. Do a good deal, don't take crazy chances, learn a lot, make a profit, and keep moving. Sometimes trying to double your money leads to losing money.
With all that said, where are you financially? If you're in school, do you have a lot of school debt? Do you have steady income to refinance and get a long-term mortgage?
Deciding to go down the flip route (aka a business) vs the rental route depends upon answers to those questions and more.
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Andrew Meyer
Investor · Bloomington, IN · Member since 2015 · 195 posts · 36 votes
10y
Once I get to town, maybe we can meet and discuss some options. Right now I have a bunch of equity in a home in WV that hasn't sold yet. I am wanting to buy other properties/investments, but I don't have access to a lot for a down payments after buying my duplex to house hack. So maybe we could partner on a BRRRR deal or something if you'd be interested in looking into it? I'm pretty sure I could qualify for financing on an investment property. I also have a lot of tools/etc from flipping my current home in WV. Just an idea.
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
@Chad Carson
I have school debt and no-income right now I start a good paying job upon graduation in June at that point with my income level it shouldn't be too hard to get some financing. I would like to employ a BRRRR strategy when I have access to refinancing but would like to try and do some deals in next 6 months why wait?
In terms of not taking crazy risks I feel with my education (JD/MBA) and construction experience (4 years running my own company) I have the tools to evaluate the financials of a deal to not do anything stupid even though I recognize I've got a lot to learn. That being said doubling 60K in one year doesn't seem to be that unattainable of a goal.
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Steve S.
Lender · Los Angeles, CA · Member since 2015 · 800 posts · 229 votes
10y
You can get a huge return being other people's GAP funds. There are so many people out there that have great deals, good qualifications but don't have the money on deals. if you have the stomach for it you can JV with people and let the deals come to you.
I know some opportunities like that.
@Alec McCullough
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Andrew Meyer
Investor · Bloomington, IN · Member since 2015 · 195 posts · 36 votes
10y
Once you get a W2 job, from what I understand, they will take some formula of your last year or two W2 income and use that, so you will likely have to wait a while before getting any serious financing from a traditional bank.
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Devan McClish
Involved In Real Estate · Greenbrier, TN · Member since 2013 · 13 posts · 1 vote
10y
@Alec McCullough implement a flip, flip, flip, buy and hold strategy. Don't listen to the people above, you CAN double your money even triple it if you set your mind to it. Use the 60k to buy a flip. Buy something at 100k with 20k down, and have the lender cover the construction costs as well. You just have to find the right banker.
Right now, I have a banker that supplies 90% of costs with my 10% down payment.
So 100k property with 20k down, put 50-60 into the properties and sell for 250k and up. You should be able to flip two properties right now with that cash and make 30-40k a flip
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
Originally posted by @Andrew Meyer:

Once you get a W2 job, from what I understand, they will take some formula of your last year or two W2 income and use that, so you will likely have to wait a while before getting any serious financing from a traditional bank.
I already talked to my bank right now they will pre-approve me with my signed job offer with my education and type of employment I think they feel pretty good about my ability to pay
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
Originally posted by @Steve S.:

You can get a huge return being other people's GAP funds. There are so many people out there that have great deals, good qualifications but don't have the money on deals. if you have the stomach for it you can JV with people and let the deals come to you.
I know some opportunities like that.
@Alec McCullough
That would definitely be interesting I'd love to hear more PM me
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Chad CarsonPro Member
Investor · Clemson, SC · Member since 2008 · 179 posts · 156 votes
10y
@Alec McCullough Nobody told you above you couldn't double your money in one year. My point was on your first deals, it's better to make sure you have some success than trying to swing for the fences. It's like the people who sprint out at the beginning of a marathon and then stop and sit down after a mile. What good does that do? Your financial success is a long haul, and you've done a good job saving $60,000 so early and getting a degree and a good job.
With all that said, I agree that a flip scenario is better right now. You have construction skills, you have cash, and you could probably use a private money loan or a local bank loan (not my preference, too slow unless you find a good one).
But to my point about not sprinting, make sure you maintain good cash reserves and don't get ahead of yourself. There will be a lot to learn on that first flip. Once you get a good deal under your belt with $20-30,000 profit, then you do the next one. If you hustle, it's possible you could do two in one year, double your money (not counting taxes), and accelerate from there.
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Elia S.
Wholesaler/Real Estate Investor/Consultant · indianapolis, IN · Member since 2009 · 265 posts · 51 votes
10y
Alec Hi I would suggest getting some Properties to Flip Like Devan Stated above if your in Indianapolis we can sit down an talk about it we can make it a win - win.
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Account Closed
Real Estate Agent · Richardson, TX · Member since 2014 · 511 posts · 161 votes
10y
@Alec McCullough I'm not sure what your current credit but you can fund your flip with credit cards. Assuming you have decent credit, you should be able to get 0 % interest for 12-24 months.

Hard money lenders are another good option but they are very expensive. They usually charge from 2-4 points and about a 12-18 % interest. This is a viable option if you have plenty of equity in the deal.

I'm not sure what your long term goals are, but you can consider getting your RE license. That will not only save you plenty of money in commissions, but you'll also be able to access the properties a lot quicker without having to rely on your agent.
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David Rollings
Investor · Indianapolis, IN · Member since 2014 · 35 posts · 12 votes
10y
take it to Vegas and put it on black
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Andrew Meyer
Investor · Bloomington, IN · Member since 2015 · 195 posts · 36 votes
10y
Originally posted by @Alec McCullough:

Originally posted by @Andrew Meyer:
Once you get a W2 job, from what I understand, they will take some formula of your last year or two W2 income and use that, so you will likely have to wait a while before getting any serious financing from a traditional bank.
I already talked to my bank right now they will pre-approve me with my signed job offer with my education and type of employment I think they feel pretty good about my ability to pay
That's awesome! I'm glad they will work with you like that.
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David Dey
Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes
10y
Originally posted by @Alec McCullough:

Hey everyone I've got roughly 60K to invest and I am looking for my first deal preferably in-state in Indiana. I don't have any access to credit but I would like to work on doubling my money in the next year. What would you do with it?
Alec
Don't be so eager to spend the money. Make sure you educate yourself to be an expert in what ever area of investment that you intend to invest in.
Until then, that money belongs in a CD, a mutual fund, or the like.
I hate to say it, and I'm not trying to say anything about the people on this site or this thread, as I have seen nothing but kind people that genuinely are trying to help. But a person that throws out a number that they are wanting to invest without the prerequisite knowledge to be able to determine a good deal and can actually see who passes the sniff test, is going to find that he and his money will be only passing acquaintances.
In the end, nobody takes better care of your money than you, and you need to be the brains behind your money first.
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
@David Dey That's good advice but I'm not somebody that's not going to crunch the numbers and just throw money at whatever comes along because so and so said to. Part of learning is asking questions and getting ideas from other people but when it comes down to it you are the decision maker and it's ones own money that's on the line. I would hope that an MBA gives me enough of a tool set to evaluate the financials on a deal to get my desired ROI.
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David Dey
Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes
10y
Originally posted by @Alec McCullough:

@David Dey That's good advice but I'm not somebody that's not going to crunch the numbers and just throw money at whatever comes along because so and so said to. Part of learning is asking questions and getting ideas from other people but when it comes down to it you are the decision maker and it's ones own money that's on the line. I would hope that an MBA gives me enough of a tool set to evaluate the financials on a deal to get my desired ROI.
Alec
I fully agree with you, that part of learning is asking questions and getting ideas, and this is a safe place to do that. My only concern was that you may have been throwing the cart before the horse. In offering the money out, hoping that some Good Samaritan investor will take your money and magically quintuple it, asking for trouble. Again, nobody takes better care of your money than you.
Take it from someone who lost a lot more than 60k to a hustler, and that was as a seasoned investor. I hope you learn from my mistakes as much as from my sucesses.
Your MBA is a great STARTING POINT for the evaluation of the financials, but there are so many more aspects to a deal than just the financials. Keep in mind, our industry's business is (or should be) "professional problem solving," every deal is unique.
You need to be ready with contingencies for when the unexpected happens.
My recommendation, is that you don't get involved with a partner on something that you couldn't take over without your partner if need be.
Also, don't back a project that you wouldn't buy yourself for the backing amount.
(Ex: a house that is worth 100k ARV bought for 50k with 10k needed to bring it to the 100k value. In this situation, the 10k to bring up the value needs to remain in escrow for either your partner to finish the work or you to finish the work)
And most importantly, stay involved!! Trust but verify!! Don't just take their word, be a part of the process. This benefits you two ways, one: it keeps you from getting screwed. 2: it furthers your education and experience level.
On a purely hypothetical question of "what would you do with 60k?" That's a great question and a great excerise for all of us. (I would and am investing in zombies houses)
P.S. I hope I hadn't insulted you when I said what I said in the first post.
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Alec McCullough
OP
Houston, TX · Member since 2015 · 98 posts · 24 votes
10y
@David Dey I wasn't insulted at all and my post wasn't in the spirit of I've got 60k somebody quick tell me how to spend it but more in the what would you do if you were in my shoes. Thanks for all the good tips.
What are zombie houses and why would you invest in those (or why are you investing in those)?
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David Dey
Investor · Lakeland, FL · Member since 2015 · 344 posts · 606 votes
10y
there is a very unique phenomenon that is occurring as a result of the mtg meltdown in 08.
Of course, we are all familiar with the fact that there was a little fraud going on during 03-07. When banks realized that they could package their loans and sell them to Wall Street, it became less about making good loans because you were going to have to service them, and more about volume. You know something is wrong when a guy working at McDonald's can buy a 500k home!!
Well as a result, there are thousand of homes across the country where the banks have determined that they have too much liability to actually take possession of the house.
You see, the homeowner only has the right to sue the bank if they actually experience loss. So whether it be bad paperwork, bad assignments, or outright fraud, in these situations banks determine not to take the property and leave it in a state of limbo.
There are two times in a file in default when a bank, or rather their lawyers, will look at a package and determine their next steps. Once at the beginning of a foreclosure, this is where they review the situation, make sure they are in good standing, and know who all they need to serve. Once at the end of the foreclosure, again to make sure they got everything right and named everyone.
If they find something at the beginning they may not even start a foreclosure, however, if they find it at the end. You will see something very unique. It could be right up to the sale date, but you will see them actually cancel the sale date, reverse the judgement, cancel the foreclosure and just walk away from the property and stop paying the taxes. Leaving it as what we call a zombie property.
Now they don't remove the mtg 90% of the time, (yes they will release the mtg about 10% of the time and boy is that a bonus). They just stop paying the taxes and walk away.
The reason they leave the mtg on is twofold.
1) if the owner is still in the house, well then it's just a waiting game. Sooner or later they may want to sell the property and do a Shortsale. If that happens, then it's no harm, no foul.
2) if the owner walks away, as many do when they receive a foreclosure notice, and the bank stops paying the taxes, then the property will eventually go up for taxes.
We go after number 2) and if we can make a deal, we just stop the property going for taxes and use the property for taxes.
In Florida, we pay no more then the equivalent of 1 years rents on these properties, so as an example, if we get $850 per month, the most we will pay for the property is 10,200. And we have had many cashflow for years now.
Just ask yourself a question, if you have 60k, which would you rather do, buy 1 house that rents for 850, or do what I do sand buy 6 houses, each renting for 850 per month.
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Patty Cox
Investor · Oviedo, FL · Member since 2015 · 37 posts · 7 votes
10y
How do you find these Zombie properties? Do you deal straight with the bank, a realtor or who exactly?
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Thomas Landis
Rental Property Investor · Bloomington, IN · Member since 2014 · 119 posts · 28 votes
10y
Hey Alec, a few of us are starting a Mastermind/REIA here in Bloomington. If your interested and available this would be a great conversation to have.
We are meeting this Saturday (and every 3rd Saturday) at 9am at Scholar's Inn on 3rd St.
More info here: https://www.biggerpockets.com/forums/48/topics/218...
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