What would you do with 100K?

Question

I did the house hack thing, bought a double unit which I lived in the lower unit and rented the upper (which i'd recommend for anyone to do).  I recently moved do Raleigh, NC leaving the investment property, now fully rented, in Buffalo NY.  I receive an offer from a tenant to purchase the home which I would like to do because I don't want to be a long distance landlord and this is in the now in the works.  The sale is going to leave me with nearly 6 figures that i'd like to reinvest (probably in Durham because the Raleigh market seems very high) but I have ABSOLUTELY NO experience on getting a home below market value.  I'm very hesitant to just use my realtor and buy off the MLS.  Is buying a REO property the way to go?  I don't have experience doing direct mailing and feel like it wouldn't know where to start with it at this point.  I want to do the 1031 exchange so i'm not hit with capital gains tax.  Should I transfer all of the profit from the Buffalo home to one other property or use it for a downpayment on a couple properties?  There seems to be very few multi unit homes around the Raleigh/Durham area so i'm most likely going to end up with single family houses.  What would you do if you were in my situation?  I'm very new to the area and as a perspective real estate investor so any advice would be greatly appreciated.

Jay C. · Answer

@Carl L DeCesare

I would buy oil stocks....Real Estate has recovered and in most markets fully valued borderline frothy..Oil at the bottom of the trough right now. If your looking for wealth its an easy choice.

Carl L DeCesare · Answer

Thanks Dawn.  I'll come to the next meet up for sure.  Where's the location?  I'm fine with investing in single family homes but so many of the successful guests on the podcast preach that it's a must to get your property for below market value to cover for unforeseen circumstances.

Jay C., I also dabble in the stock market and I've lost enough $$ trying to call bottom on oil stocks.  I'm too heavily invested now to even think of selling and it's looking like i'll be waiting quite a few years to see any returns and just crossing my fingers that the companies don't go insolvent in the meantime.

Dave Foster · Answer

@Carl L DeCesare, Did you live in that unit for 2 years?  If so then you can take the % of the sale that would allocate to the area you lived in as your primary residence exclusion tax free and only 1031 the remainder.  This would free up cash for you as well as give you a little more flexibility in your Durham search.

Dave Bauer · Answer

First post ever for me.

I will be coming into a six-figure sum this year and I'm wanting to invest it into real estate. I'm curious what others have to say about this. And the best approaches. My credit stinks right now, so do I partner up for a single property? Buy a few single/duplex/triplex and use the money for the down payment? What is the best strategy in that regard?

Thanks! Look forward to learning a lot on here.

Dave.

Dawn Brenengen · Answer

@Carl L DeCesare Welcome to the area! There are number of Triangle investors, so you are bound to make some good contacts.  There is a monthly meetup on the last Thursday of each month, so you should come out to the next one.

As far as your question goes - I help people buy homes off MLS, and the occasional off market property.  If you want to go off market, be prepared to put a lot of time and effort into finding deals.  Personally, I would invest in a few single family homes.  There are more exit strategies, better appreciation, and (as you have noticed) more availability.

REOs will also mostly be listed in MLS.

Carl L DeCesare · Answer

@Dave Foster , I did live there over 2 year and I didn't know that.  Thank you so much for the info.  Very valuable!

What would you do with 100K?

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