What to do with 100k cash?

Question

I'm having a tough time finding returns on our money and have thought about the funds in a money market with Charles Schwab. A little research discovered a Money market with Schwab(SWVXX) that pays 2.05%. I need the money accessible in case I find an investment property with a cap rate of 8% or higher. However, I believe that could be one or more years out. Does anyone have any other ideas or suggestions? Roths are maxed out, all debt is paid off except one rental which is at 3.9% fixed 20 years with 100k debt and 340k RMV. I don't know what to do with the cash, and any advice would be appreciated.

Thanks

Account Closed · Answer

@Robert M.

I have had a lot of success with loaning funds for rehab projects.  My process is as follows:

• I underwrite the project based on how much is owed (via a title company) on the first and a conservative resell value.  Typically my funds are covered around 250%, i.e. in a foreclosure wort case scenario my second position is covered twice and then some.  I am able to do this because I am familiar with the Portland Or. and metro areas.  
• Terms are about 6-month or longer depending if you need the money at maturity or later.  I review the promissory note (typically 6-months at 15-19% interest) and sign at your bank to notarize.  I email the note to the title company to record and wire the funds to title.  
• I then sit back and count the daily interest until the home goes pending and the title company calls me find out where I want them to wire my principal and interest.

I have been doing this for over 5-years and it's much easier than other forms of real estate investing by far.  In fact I sold two rentals and pooled the funds into one note on an RV park and I could live of off that interest alone if I chose to retire.  Anyways, keep well Robert and let me know what strategy you ended up doing.

Brian Garrett · Answer

American Express High Yield Savings Account at 1.90% and can access whenever you want.