We have $80k to invest but we dont know where to start.

7 Replies

My husband and I have 80k to invest but we unsure where to start.

We currently rent an apartment and have been able to save due to renting a very low cost three bedroom apartment. It has worked with well for us and our kids.

We are unsure where to start investing. My husband is currently a realtor part time and a full time furniture delivery man. I currently and a teller at a local credit union.

We have thought about flipping and rentals.

Should we start with moving into a duplex and renting out the other side? Should we rent out both sides and stay in apartment. We could get closer to $1,200 each side for duplex and are currently paying $730 for our apartment. Should we start with flipping a house first and then sell it and use the profits for a down payment on a rental?

We are in Western Michigan.

Thanks in Advance for any help!

Mel,

Here are some thoughts:

Duplex deal

If you are comfortable in your apartment I would stay there.  You'd be leaving $470 per month on the table if you moved into one side of the duplex.

Duplex deal vs Flip

You didn't share any past experience, but if you get the right deal in the right market, and are good at project management, having the flip experience under your belt would be beneficial.  It would be great to use profit off that deal to make your first buy and hold purchase.  However, there are many variables and much risk if you don't have experience doing a rehab.  Not enough info here to give a strong opinion.

Sounds like you guys are good at saving money. If the duplex cash flows well, then that sounds like the best first deal to me. If there is opportunity to fix it up and force appreciation (Search for BRRR Strategy) that would be ideal. You'd get to learn rehab and get your money back with a cash out refi potentially.

My husband has been a realtor for a year. We have no other experience. Just getting started in the investment part. 

I would have to agree with getting a duplex and renting both sides and staying in the apartment if you are comfortable there. The tenants will give you experience as a landlord and any repairs you can do yourself will add to that experience. After being a landlord for a year it will open new doors for financing new deals as you will be able to count part of the rent as income. 

The reason why most people house hack is because they don't have the 20% down to buy an investment property. You should have that covered (if not I'd love to see the duplex, ha!) Personally, I'd look for a 3 or 4 unit building to maximize cash flow.
Good luck!

I would be looking to owner occupy a 2-4 unit building, using a FHA loan to put only 3.5% down. If you utilize seller's assist you can get into a place for very little out of pocket. For example, I recently purchased a 2 unit in a good school district for the kids for $160,000. It only cost me around $8,000 down. Search "house hack" on this site.

I would then use the balance of your funds to BRRRR. Search that on this site. I think there are plenty of areas in Michigan you could buy single families for $50,000.

@Mel Kline It really depends on your ultimate goals. Do you want larger spreads, more involvement, and basically creating another job for yourself? Then flip.

Or, do you want passive income as a landlord? This is up to you and your family how you want to operate. Best of luck!

Sounds like you guys are on the right track asking the right questions. Connect with a local RIA and start asking questions about local properties. There will be someone (or several someone's) there that will know the area well and could help point you toward some properties. There should also be people in different rehab phases on their own projects that are usually more than willing to show the projects they are working on. Walk those properties and see the scope of work. It may either point you toward flipping or make you want to run the other direction!! At least then you would know if that is something you want to tackle right away! Best of luck!
Kevin

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