What would you do with 2 million in cash?

Question

Hello all!

What would your path be to even more riches if you had 2 million dollars in cash and (basically) guaranteed bank financing? Im very interested to see your creative answers. Thanks in advanced!

Adrian Stamer · Answer

Vegasssss

Richard Bradshaw · Answer

@Steven T. I would lend out the $2mil for about 7% and live off the interest. Maybe perform a couple flips for the hell of it.

Jay Hinrichs · Answer

@Steven T.  use it for leverage to start a HML company..

its what we did... for every 1 million in cash we had we got bank loans at 4 to 1  so 4 million dollar bank LOC.. rates in our day were in the 6% range on the LOC..

so with 2 million you have a leveraged 10 mil HML company.. lend money in your neck of the woods I would think very easily at 20% apr...

2 mil a year in revenue  pay bank 480k for the 8 million loan   NET... 1.5 mil mil in income 30% overhead number and your at a cool 1 million in your pocket.   pretty hard to have any income producing property come close to that...

However this is a business its not passive or semi passive like buying income property.

And a nice A to B multi family can be very passive.. buying a bunch of SFR s or smaller units scattered around is ANYTHING but passive..   I owned 350 homes at one time and its a HUGE thankless job.. I sold out 2 years ago happiest day of my life... lender more better.

Steven T. · Answer

I am very familiar with the buy and hold strategy of larger multi families. I was just wondering if there was another method for better capital appreciation. A faster method that would require more work. Thank you

Jalen West · Answer

@Marcell Salmond Congratulation on your recent recent purchase! With you remaining 30k there may be a few paths that you could take.

Option #1: Either now or after closing I would recommend speaking with your loan officer regarding financing your next purchase. Due to record low interest rates that are still available, the cost to borrow money is currently very low. If you are able to get pre-approve for another mortgage, this may be a great opportunity to buy another multi-family property with good cashflow. Your 30k can be used as a down payment for you next purchase.

Option #2: Within Philadelphia there are a number of opportunities to invest in low-income rentals. In areas such as North Philadelphia and West Philadelphia. Low-income rentals come with some stress, but if you can handle it there is a lot of money to be made. Three bedroom homes rented out through section 8 go for $800-$1,200 a month. With the 30k, you can purchase the property with cash leaving you with no monthly mortgage payment for this property. This option is great for cashflow, because in 3 years you will recoup the 30k that you have invested.

@Marcell Salmond if you would like to discuss these options further, feel free to pm me.

Melissa N. · Answer

Leverage it!  Personally, I'd buy a large apartment complex and use the 2 mill as the down payment. Of course, you'd need to have a strong team in place. Not sure how experienced you are but in one of the Webinars I remember someone asked "what advice would you give to someone WITH money" and Brandon basically said - you can afford to make more mistakes so you might be more 'free' with your money. That really stuck with me. Something to keep in mind. Always act like it's your last dollar and you'll make smarter decisions.

Marcell Salmond · Answer

@Jalen West  Good morning. I'm from Philadelphia as well and new to investing. On the 25th of this month I'll close on my 1st property.  Duplex . 257k for the property, fha loan, stay in one unit and rent the other. Mortgage will be 1658.00 a month. Upstairs unit currently renting for 1100.00 while the unit I'll be in was last rented for 900.

After closing I'll still have close to 30k in savings. My question to you is how soon and how hard would it be to buy another property? Which type do you recommend getting?

I work two full time jobs so I have some disposable income. Any advice is appreciated

Jalen West · Answer

@Steven T., I see that you are not that far away from me. Here in Philadelphia there are a range of investing opportunities with a strong rental demand. Finding the opportunity that is right for you depends on your income/NOI goals and willingness to learn. I have experience in buy and hold multi-families properties to full renovations. If you would like to run some number or discuss further, feel free to reach out. I would be glad to help you make that 2 million grow.

Justin Shepherd · Answer

Give it to a young man like myself and turn it into a billion. But thats just me. What would you do?

What would you do with 2 million in cash?

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