How would you invest 50k?

16 Replies

With so many ways to invest, how would you invest 50k? All into one deal? For multiple deals? Retirement fund? My ultimate goal is to build a rental portfolio. I'd like to build up to 10k a month In cash flow and also invest in a Roth IRA. Would love your thoughts and ideas.

Put the $50k in a SDIRA and lend to buyers for the first year. That should help build wealth to get you into rentals. You can try transaction funding outside your market.

Robert is right using the 50k to lend to other buyers/flippers is a great way to grow your capital. Just be cautious and die very good underwriting of the deals. Message me if you need any help find good deals or picking apart any existing deal flow.

If you just have 50k in cash, you won't be able to put it all in a retirement fund in one year anyway.

I was able to do my first flip with about 60k. I partnered with real estate agent who had found an off market deal. My share of the profit was about 20k.

If you are interested in flipping, I suggest doing a small deal like that, then put some or all of your profit into a traditional retirement fund. In this way your profit from the flip can be tax deferred.

Or you can have tenants if you really want to have tenants.

Very carefully.

Remember when investing in real estate or any other vehicle if you are not prepared to lose it all you are not ready to invest. Real estate investing is very high risk. The key, as with everything in life, is knowledge.

Find a market where the comps allow you to buy and rehab for that dollar amount.  Flip it, reinvest it again plus the profit in the next deal, flip it, reinvest it again plus profit in...well you get the picture. 

The idea is to treat this $50k as you seed money, that you NEVER, EVER, spend...but you use an unlimited number of times.  You are leveraging our "cash".  What you are doing is widening your "base".  Once you double the size of your base, then continue to reinvest (use) it, but start spending the continuous stream of profits (from repeated flipping/leveraging of your seed money) on cash flow properties.

@Account Closed   that's all well and good but those numbers don't exist in the Portland market not even close...

really depends on where this person wants to invest.

and out of state rehab and resale for someone not in the business is HIGHLY risky unless he has very close ties to GC in an area.

not to mention no track record very few lenders are going to take on a first timer.. capital reserves are not such that he could take a big hit and come out OK.

If the OP does not yet own a personal resi then in the PDX market a house hack 4 plex with the 50k Is in my mind the best option... but don't buy in the city of Portland they just passed some crazy rules .. buy in one of the satillete cities.

@Justin S. It just so happens that I have a first position note available in your price range if you are interested. This would be short term investment of 2-3mos with a flat fee return of 8%. If you or anyone else has interest. Just reach out to me via PM .

is it better to invest in real estate passively with a deal sponsor or DIY and deal with tenants toilets trash in the short run and then go about building your portfolio flip make some money and go about passive investments I need a suggestion please - Sri

@Srinivas Shastry

Lending with a self-directed account is not overly complicated. The first step is to open a SDIRA with a custodian of your choosing. Some custodians are quicker and more responsive than others. I recommend you do some research and call your top contenders before making a decision. 

After your new account is open, you can transfer or rollover your existing retirement funds to the new account. This is often the most difficult part as you have to follow IRS rules/ procedure to move the funds and each custodian has different rules for what they need on the paperwork. 

After the account has been funded you would send in your purchase documents to your SDIRA custodian. You would need a promissory note acknowledgement where you and the borrower have set terms, if the note will be secured, you would also need the security paperwork. Once all required documentation is in good order, your SDIRA custodian will send to investment about to the borrower. 

The final step can be changed from lending funds to buying a property. Its the same process just different documents that are required. With real estate, be sure to know the prohibited transactions and to avoid them! 

In regard to passive or not passive, that is entirely up to you and your investment goals. 

I hope this helps with your inquiries. If you have additional questions, I would be happy to connect!

Originally posted by @Robert Rayford :

Put the $50k in a SDIRA and lend to buyers for the first year. That should help build wealth to get you into rentals. You can try transaction funding outside your market.

I'm sorry but you can't do that. Contribution limit for an IRA is only $5,500 per year (plus $1,000 catch up if you are over 50 years of age) so you can only contribute $50K into an IRA over a period of 9 years. If the funds already in a retirement account - that's a different story, you can rollover unlimited amount from one retirement account into another.