How to invest with 300k

Harrisburg, PA · Member since 2015 · 22 posts · 3 votes

Just looking for some advice on where to start... I'm receiving around 300,000 very soon and want to get started in real estate. Ive been reading books and stuff on rental properties and am interested in flipping just don't know where to begin and what path to take. I'm currently working on getting my credit score up to a 750 currently around 685-695 to help with mortgage rates etc... Any advice would be helpful like can I get more than one mortgage in a year should I start with a nice multifamily and maybe by a fixer upper also for under 50k etc.... Thanks

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

put it in the bank and let it rest for a while.. deals are like street cars there is always another one on the next corner.

dont get caught up in the shiny object syndrome real estate is not that complicated and PA has some really great areas if your intent is to be a landlord no reason to run all over the country.. Prop tax's are an important component of income properties and PA has some really nice rates compared to other cities.. and also appreciation is where the money is made .
you want to invest in growing areas not stagnet areas that show no historic appreciation and or future hopes of same.

Note investing and being a lender is a pretty cool way to go as well Done RIGHT of course..

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Cameron TopePro Member
Property Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Dwight S. "don't test the water with both feet". Take your time and build your credit score, educate yourself and set clear goals. Then you'll find the right deal to help you reach your goals.
The only other thing would be go to local banks and credit unions for the best financing terms/rates.
Also, don't tell realtors or wholesalers you have 300k to invest. Just tell them you're looking to invest and have some money.
Best of luck!
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y
There are a lot of unknowns in your questions. Is your goal to replace your W-2 income so you can live off it? Are you wanting the bet returns possible with hopes of continuing to build your inventory? Are you busy with work and family and need something that doesn't require much thought or effort?
You could invest $100,000 into three different syndications. Let someone else do the work and you get returns that out-perform the stock market but don't have to do any work.
You could buy three turn-key properties through a reputable company like Memphis Invest. Again, these are fully renovated homes with a tenant and management in place so you just sit back and collect the income.
You could buy a bunch of single-family homes with just 20-25% down and use leverage to get better returns.
You could buy multi-family. You could buy a couple small multi-family or a single large multi-family.
There are a lot of ways to skin a cat but we don't know your goals, your skill set, the market, how involved you want to be, etc. Because your question lacks this information, I'm going to guess you're a new investor and would be better off partnering with someone that has experience or investing in a syndication.
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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Nathan G. Yes I am a new investor. Just been reading books and watching YouTube vids and listening to podcasts... However I like your reply and think you could help educate me in making a good decision. So I would like to have both hands off and hands on projects. I live in PA there is a reputable turnkey company here called I was thinking of investing with putting down 20% I would actually like to buy a few of these with the 20% down but I don't know if the banks will give me multiple mortgages at the same time. I also am interested in purchasing a fixer upper and flipping it also.
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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Cameron Tope thank you
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y
Originally posted by @Dwight S.:
@Nathan G. Yes I am a new investor. Just been reading books and watching YouTube vids and listening to podcasts... However I like your reply and think you could help educate me in making a good decision. So I would like to have both hands off and hands on projects. I live in PA there is a reputable turnkey company here called I was thinking of investing with putting down 20% I would actually like to buy a few of these with the 20% down but I don't know if the banks will give me multiple mortgages at the same time. I also am interested in purchasing a fixer upper and flipping it also.

Yes, the banks will typically allow multiple mortgages at once. I have eight right now and a large line of credit.
Figure out what you want to do and then start talking to lenders to see what is possible and what they will require. I recommend talking to at least three lenders. It's even better if you can talk to other local investors to see which lenders they recommend.

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Tom Ott
Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
6y
Originally posted by @Dwight S.:
Just looking for some advice on where to start... I'm receiving around 300,000 very soon and want to get started in real estate. Ive been reading books and stuff on rental properties and am interested in flipping just don't know where to begin and what path to take. I'm currently working on getting my credit score up to a 750 currently around 685-695 to help with mortgage rates etc... Any advice would be helpful like can I get more than one mortgage in a year should I start with a nice multifamily and maybe by a fixer upper also for under 50k etc.... Thanks

I would take that money and invest in multiple Turnkeys in the Midwest!
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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Tom Ott where like oklahoma? I was thinking the Dallas area also
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Brian Garrett
Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
6y
Originally posted by @Dwight S.:
@Tom Ott where like oklahoma? I was thinking the Dallas area also

I'd guess that his answer will be Cleveland for rather obvious reasons.
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Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y

@Dwight S. 1st thing stop reading books. Find a market that has double digit net caps , connect with a team that is doing deals and allow them to " work for you ". There are double digit net caps , 100% hands off to be had if you have the right team .
Good Luck
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Salvatore Lentini
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
6y
@Dwight S. - Having $300K can definitely be a good thing but be careful. Just like lottery winners that file bankruptcy a few years after winning, having a big chunk of capital as a new real estate investor comes with its own set of problems. Don't let the money burn a hole in your pocket. Just because you have it doesn't mean you have to spend it... and definitely not all at once. Starting in real estate with little cash forces you to find great deals and analyze every little income and expense. Having a surplus of cash tends to make you not worry about the numbers as much. You could set some self imposed limits to help you stay focused on the financials. Maybe you only allow yourself to use $50K on the first deal. Or even $25K. Don't just view the value of money for what it can purchase. Money has value beyond its spending power. The funny thing about having a pile of cash is lenders are more likely to lend to you and at better rates and terms. Just ask a millionaire or billionaire how much of their own money they have to put at risk in a deal. Usually very little because the banks and other partners want to do business with them and they will put up money. I did a $4M commercial deal recently and had a wealthy investor partner on board. He put nothing in and got equity because he helped us qualify for the mortgage. We had another $3M deal where a wealthy investor partner put money in but then he gets a majority of the return until we reach certain cashflow. So think of your money as a tool to get you lenders, partners and increasing your credit score (using it to pay down debt, open new lines of credit etc). But you need to walk a fine line. Like @Cameron Tope said, don't go flashing the $300K around. Strike a balance by showing confidence that you have down money but not by going around flashing it. If you come up with a plan and are methodical not impulsive, you could have a very nice size portfolio in a few years. Feel free to message with any specific questions. I'd be glad to provide advice based on my experience growing a portfolio to 127 rental units.

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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Bob Prisco when you say team are your referring to turn key companies?
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Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y
@Dwight S. yes, one that handles everything, nothing for you to do but close
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Ben Halabi
Property Manager · Cleveland, OH · Member since 2019 · 123 posts · 65 votes
6y
Originally posted by @Dwight S.:
Just looking for some advice on where to start... I'm receiving around 300,000 very soon and want to get started in real estate. Ive been reading books and stuff on rental properties and am interested in flipping just don't know where to begin and what path to take. I'm currently working on getting my credit score up to a 750 currently around 685-695 to help with mortgage rates etc... Any advice would be helpful like can I get more than one mortgage in a year should I start with a nice multifamily and maybe by a fixer upper also for under 50k etc.... Thanks
My number one choice would be multifamily. I also recommend to take a look at the Detailed Map of Cleveland, that would help you have a better understanding of the Cleveland Market areas and grades.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
put it in the bank and let it rest for a while.. deals are like street cars there is always another one on the next corner.

dont get caught up in the shiny object syndrome real estate is not that complicated and PA has some really great areas if your intent is to be a landlord no reason to run all over the country.. Prop tax's are an important component of income properties and PA has some really nice rates compared to other cities.. and also appreciation is where the money is made .
you want to invest in growing areas not stagnet areas that show no historic appreciation and or future hopes of same.

Note investing and being a lender is a pretty cool way to go as well Done RIGHT of course..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
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Alina Trigub
Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
6y
@Dwight S.

Ton of great advice. I particularly like what @Jay Hinrichs told you to do: let it rest in the bank while you 1) identify what is it that you want to do in real estate and 2) determine how to do it. Also, don't flash on social media how much money you have.
Here's an article to give you some guidance on the next steps:

https://www.biggerpockets.com/member-blogs/10850/86621-six-steps-approach-to-getting-started-in-real-estate

2 Reply
Brian Garlington
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
6y
First thing I would do is NOT tell people on a public forum that you are about to receive that amount of money while saying the city you live in :-) Edit your name to DwightS and don't say where you are from. Now for the fun stuff. Don't jump in with both feet. Test the waters by using a small portion of that money and "learn" on a smaller property investment. Plenty of those in Pennsylvania and Ohio where you can learn on and then after you learn the ropes you can use the other foot :-)
1 Reply
Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Dwight S.
Aside from what other folks wrote, I would strongly consider house hacking if it is something that your lifestyle allows. I would probably avoid out-of-state investing unless it's like a proper syndication deal. Out of town deals can work but it can also become a major hassle.
In general, I would look at your current skills and other assets (e.g. family connections, friends, professional connections, etc.). From there, try to think about how you can synergize what you already have with your investments.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Brian Garlington I actually thought that but it doesn't let me edit it here I have to contact support
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Alyssa Dyer
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
6y
@Dwight S. if you're just getting started I would vet a team via a lower risk deal. I'd start with a buy and hold cash flowing property, or a couple. Let those work for you for some time. Once you've established yourself with the team as a serious player, dig deeper into the value add deals that interest you. There's just so much that goes into value add/flipping/BRRRR projects that I'm fearful that with the wrong team and you not knowing red flags, you're at risk.
That said, just vet whoever you're working with. I'd go with a team that does more than one thing and can help you through different strategies and stages in the market. Read reviews. I'm happy to answer questions. Good luck!!
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Dwight S. I would recommend finding a few great syndicators, with proven track records, and investing with them. You can learn a lot about where to find them from a list published by BP member Ian Ippolito at The Real Estate Crowdfunding Review.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
6y
Originally posted by @Brian Garrett:
Originally posted by @Dwight S.:
@Tom Ott where like oklahoma? I was thinking the Dallas area also

I'd guess that his answer will be Cleveland for rather obvious reasons.

Dwight you live in Pennsylvania. There are a ton of super cheap metro's right in your backyard. Would make no sense for you to invest out of state when it's all right there for you.
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Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
@Dwight S. I agree with @Nathan Gesner that there isn't enough information to give you meaningful advice. The first thing I recommend is clearly defining your goals. Are you looking for equity or cash flow? $300K in capital to start with will give you a lot of options. You mentioned flips but it also sounds like maybe you are interested in buy and hold. Personally, with $300K in capital, I would finance as many rentals for long term hold. You can finance up to 10 mortgages.

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Dwight S.
OP
Harrisburg, PA · Member since 2015 · 22 posts · 3 votes
6y
@Mike D'Arrigo that is what I'm most likely looking to do with maybe one small flip just to see if I like the process but mainly buy and hold rentals that build equity over time
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Mike D'ArrigoPro Member
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
6y
Originally posted by @Dwight S.:
@Mike D'Arrigo that is what I'm most likely looking to do with maybe one small flip just to see if I like the process but mainly buy and hold rentals that build equity over time

Dwight, the nice thing about that is that your tenants are providing you with the equity.

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Account Closed
Member since 2018 · 70 posts · 89 votes
6y
I bought a bunch of houses last year in the midwest and the most successful ones were through auction sites. You need to do your homework and it really helps to have a realtor in the area to help with research, but when you are bidding on Repo properties only against people with the cash to buy it outright, the crowd is really thin.
This is especially true if you have a good & reasonable contractor so you can buy properties with issues that will scare off other cash buyers. For example I bought a house in an OK neighborhood last year that needed a new roof, flooring, plumbing work and appliances. I got the house for 15k and it cost me 6k for a new metal roof (love the Amish) and about 9k more for the rest of the issues so I had a newly updated house for 30k in an area where they sell for 50k+. It rents for 800/mo, which is about 5k net per year on a 30k investment.
Other advise is to go slow. If you go out and buy 300k worth of houses out the door you'll have missed opportunities to learn from your mistakes. Buy one and get it rented and you'll be 20% smarter about the process. Buy another one or two and get them to rental then reflect on lessons learned and repeat.

I wouldn't rush into mortgages and debt. Buy yourself 300k worth of houses (if that's your goal) over time and once done see if you like the concept and want to get deeper. If so make your debt decisions.
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