40,000 to invest
Most Popular Reply
Before looking for investment and city to invest, think about your goals. Real estate is easy to get in but it is not always profitable if you do not define exact criteria for your investments.
1. Are you willing to spend effort for rehabbing a property or you are looking for rent ready options with a certain cash-flow target? And if this is the case, why not invest in completely hands-off options like multi-family / commercial syndicates who can help you give decent returns.
2. Do you plan to invest it in all cash deals or you have capability to leverage it with mortgage? E.g. with 25% down, you can use 40k to buy properties worth 160k. In some cases (SFR), you can even leverage it upto 200k.
3. Area to invest depends on what you can really control. Buying a great property in a good city and not being able to manage remotely will kill all your profits. E.g. one month of vacancy can almost eat into all the profits from previous year.
In today's market, I am inclined to invest more in multi-family properties where an experienced investor is managing everything and I am just an investor. This is best way to invest if you do not want to be hands-on.
PS: I do own SFR and small multi-family as buy and hold. these are properties for long term passive income. So, my criterion is simple - build buy and hold portfolio for long term. Keep investing in good commercial deals that give you cash flow for short term and keep you liquid for future opportunities like 2009-11.