What to do with a sizeable inheritance?

What to do with a sizeable inheritance?

Lender · Tuscaloosa, AL · Member since 2017 · 15 posts · 11 votes

Hello BP Family,

My name is Parker Grissom and I new to BP. First, just a little back ground on me before we dive in. My brother and I lost our Mom to cancer in October of 2014. Our Mom was an amazing person. We could not have asked for a better person to raise us, mentor us, and love us. She taught us to work hard and never give up. She is the reason I am here now on BP. My brother and I seek advice on how to start our real estate investing career. We wish to continue to grow the wealth she left behind to us. To give back to the generations to come just like she did for us.

My brother and I are both in our mid 20's and work full time. We both have decent jobs with good benefits and all that jazz. But, we recognize that there is more to life than punching the clock, sitting in a cubicle, and counting down the years to retirement. We want sieze our future now rather than waiting for it 30 years from now. We understand that real estate investing is that vehicle that can get us there. We want expand the finacial wealth our Mom left us and real estate investing is how we want to do it.

Finding Bigger Pockets has fueled our desire to start investing ASAP. We are currently researching all we can to gain knowledge and insight to avoid common mistakes. We are listening to every BP podcast we can. I am currently reading "The Million Dollar Real Estate Investor" by Gary Keller. I have reached out to a local REI group and will meet with them next month. We seek advice from you all on how to continue to gain knowledge.

Our Mom blessed us with an opportunity that most people don't have. She had a successful career and always saved more than she spent. We understand the fortunate position we are in and we wish to take full advantage of it. Our trust fund is currently invested in growth stock mutual funds through a managing firm and we have been very happy with the results. However, we wish to move into the real estate rental game.

The current stragety we have chosen is to buy and hold multifamily and single family properties and rent them out. We wish to focus more on multi unit because from I have researched, they have more upside potential. The capital we have starting out would allow us to acquire them easily. With our inheritance, putting down payments on many properties would not be an issue. Eventually, we wish to acquire enough properties with enough cash flow to quit our jobs and invest full time.

My question to you all is:

What would you do if you were in our shoes?

What mistakes should we look out for?

What books would you reccomend?

Should we consider a different stragety because of the furtunate position we are in?

Any and ALL advice is welcome.

Thank you in advance,

Parker Grissom

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Chris LopezPro Member
Real Estate Agent · Denver, CO · Member since 2015 · 1k+ posts · 858 votes
9y

@Parker Grissom I have a financial planning background. Often, people are their own worst enemies when they come into large sums of money. Read the horror stories of many lottery winners. Most go from broker -> rich -> bankrupt.

Once you control the money, consider sticking all of it in a savings or similar account for 6 months and don't touch it. Let your emotions get used to having that much in the bank. Spend the time exploring and learning.

When you're ready to do your first deal, do one deal. Don't go crazy spending all of it. Buy one deal and wait 6 months. Spend that time to learn what you like about the deal, don't like, etc. You'll learn a lot more doing it than reading any books.

Then go from there. Time is on your side. Don't try to hit a grand slam this year. Consistent base hits over the next few years can set you up for the rest of your life.

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  • Rental Property Investor · Hyannis, MA · Member since 2016 · 19 posts · 18 votes
    9y

    Hey Parker,

    My two favorite topics are Real Estate strategies and Life Style strategies and you are asking questions that combine both.

    You should consider hunting for great real estate deals in a market that has strong appreciation , rental increases etc and also has great opportunities for 25 year olds like yourself.

    If you want to seize your future then you should be curious as to why some cities are so awesome that many young college educated people are moving there. Austin, Boston,Tampa, Raleigh , Denver , Seattle etc.

    Boomtowns for the young and smart.

    You are in a very enviable position to have the option to go to where both the great Real Estate deals and the 25 year old woman are hot and available.

    Some of the most popular cities for the young and educated have historically bad rent to value ratios. Boston, San Fran , NYC etc. BUT there are some cities that are boomtowns, have good rent to values , nice weather and job opportunities for yourself.

    Money is just a tool that creates options, you now have money, you now have options

    Carpe Diem

  • Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes
    9y

    Parker,

    Sorry for your loss. As some have said, do nothing right away as there will be unexpected bills coming your way. Think IRS. If you have not gone through the estate tax situation, know they will probably want a cut (depending on the size of the estate). Also, do not jump right in and buy the first deal you find. Take some time to understand the  market and the business. Find a mentor if you can.

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