Need advise on 3 million dollar investment

[Simon Ahmed]

I’m a young relatively inexperienced guy starting out in real estate. I have friends who have several single family homes and a uncle that owns a apartment complex. I’m a hustler and a go getter and willing to put in all the effort needed to succeed.

I have a bank loan of 3 million dollars at a 10% interest rate. It’s due in 15 years. I have several ideas of how I’d like to deploy it and earn a good return. But I do want to invest a portion of this money into real estate to generate a good return. What would you guys recommend investing in? I was doing my homework and it looks like mobile home parks and apartment buildings are the way forward. I don’t mind relocating anywhere in the United States (I’m from New York) as long there’s a good deal.

I was looking into some turn key providers but dismayed at the low returns they’re offering. Though if I refinance the properties I could juice up the return on my end. It seems like I should buy distressed broken down properties and fix them up to get the biggest bang for my buck.

What would you guys recommend? I’m a little bit lost and some guidance would be appreciated

[Dan Weber]

Do not go with turn key - you won't get the returns to justify that 10% interest rate. You're going to be looking for value-add multifamily. Seeing as how it is such a high rate, that seems like it would be better for flips/transactional funding. Look for multi-family that needs some work. Purchase and renovate it with that $3 million, refinance into a long term loan with better rates (20 year, 5%-6% commercial loan), and pay off that $3 mill. Rinse and repeat. You're not going to want to purchase something with that interest rate and actually pay that for 15 years, at least not in this market with such low rates across the board.