Made $150K on our first property. Now what?
My wife and I purchased our first property in 2013 and just closed on the sale after renting it out for 4 years. We made $170,000 on the sale of the house.
We want to invest most of it in real estate. I'm an Apache Helicopter Pilot in the Army (currently deployed).
What has worked for you? If you could start out with $150K, what would you do?
I'll continue to read the forums to seek knowledge & wisdom.
Thanks!
@Turo Tales the opportunities are endless. Get clear about your 5 year goal. Do you want to do buy and holds? Invest in flips? Then work the plan backwards!!
@Turo Tales first thanks for your service! We have the privilege of doing things we love like real estate investing because of the men and women of our armed forces. Anyway, a 1031 exchange ie buying a more expensive property like a multi family house will be a reasonable next step, but again as most of the folks in the thread may ask you, what’s your goal?Once you identify that, you can determine your next steps. A lot of the folks here are very seasoned and will be a wealth of guidance but of course you have to do your own research and due diligence. Best of luck!
@Turo Tales
Like others have said. What is your end goal. Not generic but a written down goal. Think of it like a business plan. You have to have the plan before you can start.
If I were you, taking into account military PCS’s and deployments and everything else. I’d either do flat out passive investing, stocks, performing notes and just let me money grow for the time being.
OR
And this is my preferred option. I would search for an area of the United States local or otherwise that I understand and find a 5-30 unit property that I could purchase using 120 as a down payment and have 30k as reserves and rehab costs during turnovers. This would allow you to take on a smaller profit margin place and given you lower taxable income level, gotta love BAH, you would be able to mathematically take a lose each year on paper however in reality make money.
PM would enjoy discussing further as always.
@Turo Tales Congrats on your success! As a military member myself, I know the challenges involved with investing while being active duty. If you are looking for passive income, I'd recommend three options:
1) Become a private lender for other investors that are looking for private money. Many investors will offer great returns on your money so they can use it to flip houses. This is a very passive way to put your money to work for you and requires very little time. The biggest challenge is to make sure you are doing business with someone you can trust.
2) Invest passively in a syndication that another investor is sponsoring. You can invest into an bigger deal and can make a decent return on your money. This will more than likely be less of a return than being a private lender, but still a good option for passive income. Many will require that you are an accredited investor, but there are others out there that don't require that.
3) Purchase turnkey rental properties from a reputable turnkey company. Although still passive, it will probably take a little more work as you will still need to manage the property manager from time to time to ensure your investments are performing.
I personally like either option 1 or option 3, but have done all three. I like option 3 because you have many more tax advantages when owning your own property and is a longer term solution to building your wealth. Hope that helps! Good luck.
@Turo Tales buy rental props
Good luck
@David Fairall Thank you.
Thank you for your service!
Congrats!
Suggestion is to either stick to what you know or invest passively with someone that knows what they are doing in the specific asset that you believe in. Good luck!
-
Developer
- The Passive Investor Show
@Stuart Grazier what are some turnkey companies that you recommend buying from?
@Dana Chann I’ll send you some thoughts via personal message.
Skip the physical investing and just talk about it on youtube and make 10x the money. Who needs escrows, offers, and tenants anyway.
$150k is a more than respectable amount to get started. What's your goal? Cashflow or appreciation play?
Here a couple of ways on how I personally would invest the $150,000.00 in both situations in real estate.
Cashflow:
I personally like Ohio and Michigan so I will use these for my example: I would likely purchase 4 solid B class SFR within the $100,000.00 - $150,000.00 range with 20% down on each property. This will leave you with roughly $10,000 +/- in reserves for each property to get started. It's unlikely that you'll net anything above 9% in these areas as you would in C/D areas as they're less risky but count on a safe 6-8% net. (At least that's what i'm currently getting in both of my markets)
Worse case, I would net $125.00- $150.00 per month per door which would equate to about 6% give or take on $100k invested. I would be very satisfied with this with the long game in mind.
If you're interested,
@James Wise is the man in the Greater Clevaland area, and if you're interested in a few suburbs of Michigan, I can introduce you to my contact out there as she is not on the BP platform.
For Equity Play:
Again, this is what I personally would do.
I would purchase 2 properties in the $300-350k range in a growing market and break even or even put in a couple hundred every month and just hold and wait with the end in mind to sell and 1031 all of the capital gain into a large multifamily complex or something along that nature.
There are still good pockets of the Greater Bay Area that I would invest in for the long term, I like Austin Texas and its surrounding suburbs, and I like Oregon/Washington area. I'm sure there are plenty of growing and emerging markets elsewhere but these are the areas that i'm invested in and areas that i'm very familiar with as I prefer to invest in what I know.
Another option, is to take that $150,000 and invest in a business franchise of some sort.
Lots of options, best of luck to you
-Junior
Also, Thank you very much for your service to protect and serve our country. I wanted to make sure that doesn't go unnoticed.
Much appreciated
-Junior
@Turo Tales I would buy some distressed properties and brrrr. Congrats on the sale and the profit! Awesome!!!