Sewell, NJ · Member since 2017 · 9 posts · 3 votes
I want to ask everyone in here what they would do if I had given them $20,000.
This could be answered 100 different ways and quite frankly I would love to hear all 100 answers.
Try to be as specific as possible, don't just say "I would invest it" tell me what you would invest in and how you would do it with your $20,000 budget.
Go!
If I wanted to be active, I would probably start a small cash business within my area of expertise, Something small and simple, maybe construction since I have a background in it. Or I'd buy a cheap buy-and-hold (maybe combined with private/hard money to cover the difference, if necessary) that cashflows.
If I wanted to be passive, I'd either invest it in a fund, tax liens, a private money loan, or lend it out through a hard money deal. I'd also probably consider doing some P2P lending in unsecured notes which you can invest in for as little as $25, I've had average returns between 10-12% range. Not bad, for little to practically no work, all done at a computer.
Oh and I'd also consider paying down debt or funding my retirement accounts.
@Kevin Mc Collick I live in NY Queens and the market is really high right now as well in Brooklyn and Manhattan but you have certain part in New Jersey and Bronx that's really cheap so I would look for a great deal where i would purchase a property for $300,000 then go get a loan from QuonticBank then close the deal or find a property put the $20,000 get it in contract than sell the contract to a Developer for however how much I want or do a wholesale deal there's so many ways it's up to you to see which route you want to take. But I would go with my first choice for steady income until I can move into something different
@Kevin McCollick I would use it as a down payment on several different investment properties. I go by a rule when I make down payments on my rentals. Every $1,000 that I put down, I want $100 of cashflow. I may put $3,000 down on this property that cashflows me $300 per month. The next place I may put $10,000 down on a duplex that cashflows me $1,000 per month. You can see the way its going that I would turn $20,000 into $2,000 per month income. Its something I'm patient at. I pick through my wholesales and keep the ones with the best cashflowing numbers to my self.
@Joshua Hollandsworth thanks for the reply what your friend is doing is really interesting to me, but it sounds like it is kind of "unofficial," which may just be the way this type of property operates. I guess I was thinking more along the lines of finding an agency or something that has experience with these types of homes and to my understanding they provide the staff to manage the residents and the property.
I know this population can be difficult to work with and yea the neighbors I'm sure are not too fond of these homes. Luckily in my area there are opportunities, at least I believe, where this can be successful. My city is located between Chicago and Milwaukee (about an hour to each city) and even though my city is pretty suburban, about 20-30 min west from me there are plenty of big old homes on large plots of land, towns that have population of 10,000 or less compared to about 100,000 where I live in the city.
Thanks again for the info, I am definitely going to try and find out more about this topic.
DO NOTHING!!! Set a goal. Create a Plan. Then worry about financing and money.
1) I would define my goals. What do you want in life, in real estate, in your career, and what is your individual goal(s)?
2) Then I will decide how I "may" use my $20K to achieve that goal. You may realize you can achieve that goal with $5K or no money down. All depends on what you want!
What would you do with $30K? or $40K? or $60K? All attainable goals when starting at $20K. I am sure you will not do the exact same thing with $40K you would do with $20K?
I'd use it as my contribution to a down payment on a multifamily, and try to raise another 80k or so. 13% or better annual return to investors. I think a little could go a long way. (I have 11k, so I'm not too far off ;)
Best,
JTM
@Edgar Perez Keep me posted! My friend did give me some advice. The home should be near a Bus line. Very Important! Most of these guys will not have cars. It does not have to be an "unofficial" type deal. I would not trust any 3rd party for finding these tenants. Try renting weekly vs monthly. This SHOULD simplify the eviction process. Go down to a local place where AA and NA meetings are held. Maybe volunteer a few nights a week. This should help you find connections! Good luck.
Kevin McCollick $20K is not a lot of money so instead of seeing it buying power for something tangible like property or stock I personally see it as seed money to invest in yourself whatever that may be. RE license, college education, mba (well...or least a semester :) ), etc. I see $10K, $20K, etc. as just not enough to make sizable dent in RE. You can definitely get started though. If your itching for something tangible I would go through the owner occupied duplex/tri/quad on an FHA loan route like 50% of the bp podcasters as well as many in this community got their starts, yours included. Good luck!
Buy a 3 bed 2 bath Apartment in Orlando, live in one unit and rent out the other two rooms on AirBNB, use the cash flow to level up to more apartments and expand my AirBNB business.
It really depends on your long term goals or what attracts you about investing in Real Estate!
If you want a long term investment that gives you a nice solid cash on cash return. Then use the 20K for a down payment on a rental property!
If you want to grow your money quickly, look to partner with a fix/flipper that needs some extra capital and split profits. That could really grow you money quickly and you could bank on the partner for experience and navigating the project.
To piggy back on this, what would you do as an aggressive strategy with the following info:
-Live in a state over saturated with flippers/wholesalers (I've looked at probably 40 deals with fluffed up numbers) and expensive buy and holds
-Have a fairly flexible schedule, meaning can invest in other areas, be hands on.
-FHA not an option as I own a home that is increasing value pretty quick in this market and will turn into a rental in a year or so, don't want to mess with that.
I'm leaning on either trying notes (performing or nonperforming), buying and rehabbing a rental in another (cheaper) city, buying and rehabbing a multi-family in another state.