Best use of large amount of cash

107 Replies

Gilroy/Half Moon Bay, etc are not particularly commutable, but easily drivable. Sonoma has some places up in the hills that are surprisingly reasonable, but fire is of course an issue. Again, drivable, but miserable if you have to commute. Santa Rosa used to be overlooked, but that might have changed in the past few years.

@Sean Resavy I wouldn't NOT buy in Benecia if I found something affordable (though Vallejo is MUCH more likely) but I'd consider all kinds of non-standard things too -- probates, owner rent-backs, location mismatch (ie residential surrounded by warehouses), industrial conversions, non-financeable (no foundation, "functionally obsolete" ie 1bed/1ba, 600 sq ft) etc. For me it's all about the space Personally I'd love to find an old hotel to retrofit for co-housing, but that's just me. Older areas do have all kinds of odd housing tucked away in weird corners -- permitting & legality are whole different issues that have to be considered, but if that makes it affordable... . Given the military history of the area I might find out if any of my friends have a Geiger counter though LOL. 

I'm investing in a short-term vacation rental in NW Arkansas. Awesome area to both live and invest in. If you leveraged $600k you could buy both your own nice primary residence(or a house hack) and a few Vacation rentals that could easily do $70k in revenue a year each. Any property you buy down here will see its value appreciate.  And there is a great vacation rental management company that will make it incredibly easy for someone new to run a vacation rental. The cost of living is pretty cheap down here as well so whatever you make in rent goes much further than most other areas.

I haven't read all the replies but I'll say the unpopular thing and suggest you get into a house hack situation somewhere you are happy to live and ideally is also a decent place to invest (although don't discount long-distance investments). I don't know your work situation but I would basically put in whatever cash you need to in order to a) get in (if you have no job or a new job you might not be able to finance) and b) attain cashflow neutral or positive. That might be 40% where you live or 20% and it depends on what kind of house/neighborhood you are happy living in. If you can house-hack though you will free up a large amount of your financial power to grow your net worth quickly. Get a 4 or 5 bedroom + place if you can and rent out every spare bedroom.

I also think when you are new trying to skate by with minimal CF on each deal is a very risky proposition, because its easy to make calculation errors or discount expenses that you didn't properly account for and then end up in a tight situation, with that much equity your primary goal should be to not lose it. 

Once you get comfortable with how to operate a rental and have your financial affairs in good shape you can always refinance your 2-3 properties and buy more. This isn't even the best market to be leveraging, unless you find a deal, but you are new so you probably don't know what a good deal looks like anyway. 

Oh and start learning how to spot a good deal :) some of that will just take practice by buying a bad deal. 

Hi @Mark Seery . Great question. Lots of great feedback. I’ll recommend exactly what I do myself.  I would do a significant amount of due diligence to find the best possible syndicator in the asset class you want to invest in. Passive investing with a pro is a great way to protect against downside risk and provide predictable returns.  With virtually no effort on your part after sponsor selection. 

I would start by getting @Brian Burke ’s book The Hands-Off Investor.  Then check out The Real Estate Crowdfunding Review to find reviews on the best syndicators and avoid the bad guys.  Good luck!  

Originally posted by @Jordan Moorhead:

@Mark Seery househack and invest in syndications OR start doing BRRRR OR multifamily. Find something that lends to your skillset

I am starting to look at syndications...  What criteria do you use to pick one?  Worried that some are too good to be true. 

Hello Lindsey Ceane, You can do a Search on Google, like any other type of Investing in Stocks and Commodities. Search for Syndicators Real Estate and it will get you to all the explainations on Crowdfunding. Read everything. Then, do a Search for Syndicators Real Estate will get lots of video lessons to watch and quickly learn about the business. The one thing that I am interested in with Passive Investing is the Dollar amount of the return...after Taxes. The question is if you have enough Money to Invest for a Five Year timeframe to make 3 to 6% worth your while? Syndicators give you the choice to make percents of the Rents and or Appreciation over the timeframe invested. With this new Administration, we have current Inflation at greater than 5% and that will last as long as they suppress our Energy Production etc. That means that Investing in Syndications will Net you a negative on your Dollars Invested after Taxes. Do you know how to stop a Bird from flying away? "Put salt on it's tail.