How would you invest 100k??

Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes

You need to invest 100k. Lets just say all things aside you have a measly 100k to invest in real estate right away. Without starting a business in your opinion what series of investments would generate the best return with average market risk.

I do have a plan already but I would love to hear other intuitive answers as well. Thank you!

*disclosure - any answers below are not investment advice and should not be considered as such but mearly educated opinions by professionals.

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Stephen Dickey

Investor · Charlotte, NC · Member since 2014 · 80 posts · 45 votes

Go to your local tax office. Look at list of upcoming foreclosures. Check out the houses. Do some due diligence. See if any of them can be bought cheap, and figure out rehab costs. Run some numbers. Find out the ARV. See if there is a profit margin, and how much equity the house could have after repairs. Determine if you could either A) flip the property and profit, or B) rehab and refinance to repeat above steps (BRRR strategy). Purchase house. See if you can secure private money or hard money for rehab. If not, use the capital. You can sometimes build equity if making the right deal. Keep remainder of $100K for future purchases. Some of these houses in certain areas can be bought for a substantially good price from tax liens. Make some money, or set yourself up for some passive income. Rinse. Wash. Repeat.

I have successfully done this four times, and I had a LOT LESS THAN $100K when I got started. It is risky, but if you do your homework and find the right deals, you will receive a significant amount of leverage which you can use for future endeavors. Just don't get burned!

Also, using money as a downpayment on multis is never bad, as long as the money is being made on the purchase.

Either way, by having $100K, you have a lot of options! It all just depends on what you want.

Happy investing!!

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Joe P.
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
9y
100k cash? Mattress, of course. :)
I'm curious to see how people might answer this myself, but I'd try to find two multi-unit properties in a decent area and use the 100k as down payments. Any leftover money could go to repairs and I'd look to get the passive income rolling. I guess if you had ANY money still left over, I'd keep it "in the business" but look for some REITs to invest in as future capital if needed.
2 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
Sounds reasonable enough! Thanks for your input!
0 Reply
Joe P.
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
9y
@Kory Denny what were you thinking of doing? I just realized you asked for a series of investments which would generate the best return with average market risk; are you seeking long term or short term gains? Perhaps 100k in the stock market might be more high-risk/high-reward in the short term?
1 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
I do play with the stock market but thats just my fun money. I play with options and defined risk if anyone knows about spreads and calendars.
My answer is all real estate options are open. Im interested in what the opinions of other investors not creating a strategy for myself.
0 Reply
Addam Driver
Investor · Atlanta, GA · Member since 2017 · 69 posts · 54 votes
9y
Hi Kory Denny I was JUST in your situation from a company gone public. I would suggest taking that $100k, starting a real estate holdings company, buy cash flowing properties and try to get the best return on it. Example,I'm in escrow for 3 duplexes right now with my cash. Each property was $67k. I was able to finance it using the cash as collateral. These properties are already rented and my cash flow is $2200 a month. Closing cost, down payment and repairs are around between. $16k - $20k a piece give or take a few grand. So $60k of the $100k is bringing me $2200 a month. The last $20k I'll use for my next deal for more cash flow. I hope this helps.
4 Reply
Addam Driver
Investor · Atlanta, GA · Member since 2017 · 69 posts · 54 votes
9y
Sorry typo... *the last $40k I'll use for my next deal.
0 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
0 Reply
Malcom Smith
White Plains, NY · Member since 2013 · 5 posts · 1 vote
9y
2.2K off 60K is very good! How much of that is profit after you paid the lender, management, turnover etc?
1 Reply
Gary NelsonBusiness Member
Real Estate Agent · Branson, MO · Member since 2016 · 141 posts · 93 votes
9y
I would use a good chunk of it as a down payment on a decent size mobile home park with many empty lots. Then buy mobiles to rent out, plus lot rent. Maximize utilization and stabilize at a great cap rate. Then sell at a slight discount to @Brandon Turner (I heard he's in the market to buy one). Then I would partner with Beardy on some sweet AirBnB deals and ride off into the sunset. :)
[email protected]417-464-6915
Gary Nelson Real Estate, EXP Realty, LLC554 Reviews
Website View Page
5 Reply
Account Closed
Investor · Baltimore, MD · Member since 2014 · 1k+ posts · 688 votes
9y
Lottery tickets...boom
1 Reply
Addam Driver
Investor · Atlanta, GA · Member since 2017 · 69 posts · 54 votes
9y
Originally posted by @Malcom Smith:
2.2K off 60K is very good! How much of that is profit after you paid the lender, management, turnover etc?
Hi Malcom,
That $2.2k is the profit.
Purchase price: $67k
Finance: $67k - 20% = $53,600 ($13.4k)
Rate: 4.875%
Mortgage: $283.66
Tax + insurance = $77
Prop. Mgmnt = $108 (9% of rent... Kind of high)
Operating cost = 283+77+108 = $468
Total rent per mon. = $1200 ($600*2 units)
Cashflow per duplex: $1200 - $468 = $732
Cashflow: 3 (duplexes) * $732 = $2196
Granted this is best case scenario and doesn't include vacancies and random repairs but it's still a good return.
Cheers!
2 Reply
JP A.
Colts Neck, NJ · Member since 2017 · 27 posts · 6 votes
9y
Amazing deal! In a little over four years you would have recouped your 100k and have those properties paying for themselves. What state did you invest in?
0 Reply
Addam Driver
Investor · Atlanta, GA · Member since 2017 · 69 posts · 54 votes
9y
Originally posted by @JP A.:

Amazing deal! In a little over four years you would have recouped your 100k and have those properties paying for themselves.
What state did you invest in?
Hi JP!
I invested in Georgia outside of Atlanta. Rual areas and small towns. Tenants are hardworking good people too.
0 Reply
Stacey Johnson
Investor · Springfield, MO · Member since 2016 · 1 post · 2 votes
9y
If I had $100K that I HAD to invest... Multifamily... In any capacity, but smaller apartments would be the main focus, followed by multi-plex, then finally duplexes...
Would love to hear what your real estate plan would be if you didn't have BP influence...
Thanks and good luck!
S
2 Reply
Stephen Dickey
Investor · Charlotte, NC · Member since 2014 · 80 posts · 45 votes
9y
Go to your local tax office. Look at list of upcoming foreclosures. Check out the houses. Do some due diligence. See if any of them can be bought cheap, and figure out rehab costs. Run some numbers. Find out the ARV. See if there is a profit margin, and how much equity the house could have after repairs. Determine if you could either A) flip the property and profit, or B) rehab and refinance to repeat above steps (BRRR strategy). Purchase house. See if you can secure private money or hard money for rehab. If not, use the capital. You can sometimes build equity if making the right deal. Keep remainder of $100K for future purchases. Some of these houses in certain areas can be bought for a substantially good price from tax liens. Make some money, or set yourself up for some passive income. Rinse. Wash. Repeat.
I have successfully done this four times, and I had a LOT LESS THAN $100K when I got started. It is risky, but if you do your homework and find the right deals, you will receive a significant amount of leverage which you can use for future endeavors. Just don't get burned!
Also, using money as a downpayment on multis is never bad, as long as the money is being made on the purchase.
Either way, by having $100K, you have a lot of options! It all just depends on what you want.
Happy investing!!
5 Reply
Andriy Boychuk
Rental Property Investor · Staten Island, NY · Member since 2013 · 480 posts · 197 votes
9y
@Kory Denny it depends how active I want to be. I would use the money to buy the next mobile home park. Or if I accredited investor, I would invest in mobile home park fund (8-12% interest)
1 Reply
Brian Adams
Syndicator of Large Apartment Buildings · Glen Mills, PA · Member since 2009 · 1k+ posts · 1k+ votes
9y
@Kory Denny if you are wanting a hands off approach and looking to generate passive cash flow on the $100k, in my opinion, invest in large multifamily deals with a solid operator/sponsor.
I define large multi's as greater than 100 units, although I buy 200 to 400 unit deals, the larger the deal the better economies of scale and you are able to spread the operating costs across more doors to mitigate risk.
Good luck!!
2 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
@Brian Adams first off let me say I really enjoyed the podcast you were on. I think I will revisit it on my hour drive home. I've made it through 155 podcasts in about 2 months lol.
Thank you for your opinion. I have researched syndication and see the value in economies of scale. I'll continue to learn about this strategy and I hope to be doing deals like yourself!
0 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
@Stephen Dickey great advice. I haven't started looking at foreclosures yet but I will! I see tremendous value in what you have said. I am in a niche market that has much higher rent prices than counties surrounding so I have considered the brrrr strategy as the most serious contender for return with the experience I have.
0 Reply
Kory Denny
OP
Inspector · Raleigh, NC · Member since 2017 · 55 posts · 25 votes
9y
@Stacey Johnson well I have been working on a few different plans. I have been/ will continue buying properties with VA loans at 0% down, updating as OOPR, getting them rent ready. After a year or two look into refi out with conventional mortgage and forced equity. This also seems to work with 4 unit multis although very difficult to find. More than likely will run into problems at 5-10 mortages. Which leads me to my next strategy that is raw land / new construction. I would like to purchase a few lots and build new construction (with partners) while outsourcing the build and being the GC myself. I've considered starting a PM company in my area but that's a different topic all togethor.
0 Reply
Raul TiradoPro Member
Stony Point, NY · Member since 2014 · 26 posts · 5 votes
9y
@Kory Denny Thanks for this posting. I'm in this exact position. I have a $100K to invest and have been trying to figure out a strategy. Definitely leaning towards the multi family strategy. Now I just need to get out there and find a couple of deals.
1 Reply
Susanna B.
Real Estate Agent · Blythe, GA · Member since 2016 · 46 posts · 13 votes
9y
@Kory Denny If I had $100K to invest there are tons of properties in Augusta just waiting to be had and many of them already have established renters in place. You would easily be able to buy 4-6 SFR depending on the repairs needed and they will rent, even when not in the best of shape, for around $600-$800 for a 2/1 and $750-$950 for a 3/2 and that is being conservative. If I had the cash, I would probably do some of it outright cash and finance some so I can keep my options open and then use the cash flow from the investments to finish paying for themselves.....what fun to dream....
2 Reply
Elias Gilchrist
Rental Property Investor · Norcross, GA · Member since 2017 · 19 posts · 6 votes
9y
1.you can invest in tax liens.
2. You can buy and hold property to create passive income.
3. You can buy fix and sell.
4. Become a hard money lender.
5. Invest in REITs
0 Reply
Susan K.
Real Estate Agent · Palm Beach Gardens, FL · Member since 2017 · 199 posts · 124 votes
9y
Addam, could you let me know what lender you used? Thanks.
0 Reply
Addam Driver
Investor · Atlanta, GA · Member since 2017 · 69 posts · 54 votes
9y
Originally posted by @Susan K.:

Addam, could you let me know what lender you used? Thanks.
Hi Susan!
I used BB&T for this deal. The main reason I went with them is that they allow me to quit claim the properties to my LLC at closing w/o penalty. I used my personal credit to get the lower rate, but the LLC owns the properties. I wanted better cashflow.
Cheers!
1 Reply

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