What would you do with 70k cash during Covid?
Rental Property Investor · Columbia, MD · Member since 2016 · 19 posts · 9 votes
What would you do with 70k cash during Covid?
Most Popular Reply
Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 2k+ posts · 3k+ votesI'll let @Joseph Schweizer speak about his personal experience, and cash flow that he is achieving. Since you've mentioned you were looking for more people's experience with TK, I've posted some good forum links below that should help you get a better idea of investors experience going that route. Jason brought up the brrr method, but what everyone fails to mention is that strategy can involve significantly more time, risk & money. It can be a productive way to increase equity, but if you are a newer investor, or looking to invest away from where you personally live, then I would not recommend that strategy for someone who is just getting started. Just because you attempt a brrr, does not mean you are guaranteed equity, or that everything will go as planned and turn out the way you anticipate. Just be prepared for that if you attempt your own flip as it is very time intensive, has many working parts involved, and there are a lot of variables. I will be the first to tell you from the perspective of someone who flips or brrrs professionally & has done 3,000+ homes over the past ten years, very rarely does everything go as planned to work out perfectly, and this can very easily become another full time job! The variability of unforeseen rehab, missed calculations on ARV, extensive holding costs, delays in completion that become rather costly (especially if using hard money), market changes, permitting issues with the city, unknown title issues, potential vandalism/theft on vacant units, dealing with contractors & other trades that don't complete work to standards, or have to be fired, etc. the list goes on & on. I'm not trying to discourage the brrr strategy as that is essentially the business we operate in, but it is important to know what this strategy truly involves, and the risks associated with it. Many people on BP fail to mention those aspects, or are not actual flippers themselves to fully understand the process. Most people lose money on their first few flips, which is fine if you learn from that experience & keep going, but unfortunately many people call it quits after those first few expensive lessons. There is a learning curve like any new endeavor & sometimes you simply don't know what you don't know. This is why I feel a TK investing is an excellent place to start for a newer investor where you tap into an immediate team & network to take an easy entrance into investing with a higher propensity for success to learn the ropes. This will allow you to become familiar with a market, and start to build your own network leveraging the experience & team that we have already built successfully for many years. As you become a more experience investor, you can then decide if you prefer to take a more active role to attempt some of your own rehab jobs, or simply scale up your rentals via TK investing like you already have been & diversify across multiple markets. TK allows you to likely scale much quicker than you could achieve on your own, and you have immediate access to a team that has a proven path to success to guide you throughout the process which really is more valuable than the property itself in my opinion. I digress...and will get off my soap box, but the last point I'd like to make is that there is no reason in the world you can't do multiple strategies over time as you become a more experienced investor. Many people think there is this brrr vs turnkey, when in reality I think employing both over time is the best approach depending on your goals. It just depends where you get started, and that you DO get started. Don't let analysis paralysis prevent you from taking action like it does for so many!
Rachel, if you have any questions on anything I discussed please let me know. Below are some forum threads to read that will allow you to see more investors experiences buying TK properties.
https://www.biggerpockets.com/users/ZacharyCole/references
https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster
https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review
https://www.biggerpockets.com/forums/92/topics/808479-rent-to-retirement-experiences
https://www.biggerpockets.com/forums/12/topics/533693-anyone-worked-with-renttoretirement-turnkey
https://www.biggerpockets.com/forums/92/topics/581730-rent-to-retirement-zach
34 Replies
- Member since 2020 · 5 posts · 0 votes5y
@John Morgan just curious would be turn key, brrrr, flip?
- Member since 2020 · 7 posts · 7 votes5y
I would use some to invest in cryptocurrncy. I would also use some to buy euros. Anything to hedge against the USD which is a shambles.
- 5yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
@Zeleste Agosto Henry
I've done turn keys and BRRRRs. I started buying properties that were pretty much ready to rent right away. Those were simple and fun. I bought four with tenants in place that worked out great too. No work to do other than minor things to let your tenants know you care. And I've BRRRRd three which give me my highest ROI. I would recommend putting 20% down on a turnkey at first just to learn a little and see if real estate is for you. Once you're comfortable with it and have a contractor that you can trust, try a light rehab to buy n hold.
- Specialist · Scottsdale, AZ · Member since 2014 · 626 posts · 700 votes5y
@Marcus Palm If you are going to pursue a passive investment through syndication, make sure to analyze the opportunity through the new "Covid Resistant" lens we should be wearing. Some asset classes did not fare well during Covid and the jury is still out on some as well. Covid is a great example of how we cannot prepare for every variable that could come our way, but if you are invested in the right asset class that can weather the storm, you will be able to sleep at night. For example, MHPs have always been known to be a recession resistant asset class, but now they have proven to be Covid Resistant as well.
- 5yAJ ShepardPro MemberReal Estate Syndicator · Portland, OR · Member since 2014 · 453 posts · 312 votes
Good to hear you're trying to invest the money you have during this pandemic.
If I have the cash myself I'm sure to invest my money on the BRRRR method where I can increase my ROI or in Syndication which assures passive income and stable cash flow.
You can listen to Joe Fairless - Best Real Estate Advice Ever or you can also start reading his Best Ever Apartment Syndication Book.
- Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes5y
Originally posted by @Marcus Palm:
Just wondering what would people do right now if they had 70k cash on hand. Where would you invest it? Would you just leave it in a savings account for now?
Probably make a downpayment on an investment property in the Midwest. Sit back and let it build.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.