20 Million in Real Estate. What would you do?

61 Replies

I got featured in a recent blog post of Joe Fairless!

I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.

What would you do if you received 20 million in real estate?

Is that truly the "Highest and Best" use of the 20 million?

Would you invest in something else besides real estate?

Cheers and happy discussion!

nah, at that point, I'd have better more important goals than investment returns

I'd be the bank and have a team of people to deal with lending out the money.... 

Originally posted by @Deren Huang :

I got featured in a recent blog post of Joe Fairless!

I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.

What would you do if you received 20 million in real estate?

Is that truly the "Highest and Best" use of the 20 million?

Would you invest in something else besides real estate?

Cheers and happy discussion!

I'm all about cash flow, so NNN leases would not cut it. Without a doubt cash flowing multifamily.

@Matt K.

My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive. 

Originally posted by @Anthony Gayden :
Originally posted by @Deren Huang:

I got featured in a recent blog post of Joe Fairless!

I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.

What would you do if you received 20 million in real estate?

Is that truly the "Highest and Best" use of the 20 million?

Would you invest in something else besides real estate?

Cheers and happy discussion!

I'm all about cash flow, so NNN leases would not cut it. Without a doubt cash flowing multifamily.

Cashflow if you want to be a landlord lol, NNN about as passive as you can get. Plus add in a big player like Starbucks and sit back and collect those checks.

Originally posted by @Deren Huang :

@Matt K.

My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive. 

Hence the team comment and go towards the commercial side of things

@Anthony Gayden

Would you still look for value add? Seems like you still would be hustling even with 20 million. 

Originally posted by @Matt K. :
Originally posted by @Deren Huang:

@Matt K.

My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive. 

Hence the team comment and go towards the commercial side of things

What are the rates for commercial? 

NNN's are running 5-6% back. (Not quite sure, I'm not quite there in my career haha)

 Obviously there would be funding fees and points included to profit, but no depreciation and tax shelter.

@Deren Huang I don't have the slightest clue, I also don't have 20 mil so never really looked into it. I can say though, there's something to it if high net-worth folks and hedge funds are doing it. 

I can tell you this, I'd have plenty of people much smarter than myself help me create a plan and take care of the details well before I hit the 20 mil mark. They can handle the tax strategies etc.... 

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.

Originally posted by @Caleb Heimsoth :

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.

 Wouldn't 1.6M return = retirement at almost any age haha....

Originally posted by @Matt K. :
Originally posted by @Caleb Heimsoth:

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.

 Wouldn't 1.6M return = retirement at almost any age haha....

Probably but if I was say below 40 I’d probably just go do something else like start my own business or something.  It also depends on your personality, I’ve known of or heard of people who make more than 1M annually and still work into their 60s.  

With 20 million in liquid I would probably not be investing in RE. More likely more along the lines of cash preservation and a lot more conservative like bonds and treasury bills.

With that kind of scratch all you need is 3% annually even 2% would get you 400k! That is plenty! NO need for any additional risk

Chris

Originally posted by @Caleb Heimsoth :
Originally posted by @Matt K.:
Originally posted by @Caleb Heimsoth:

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.

 Wouldn't 1.6M return = retirement at almost any age haha....

Probably but if I was say below 40 I’d probably just go do something else like start my own business or something.  It also depends on your personality, I’ve known of or heard of people who make more than 1M annually and still work into their 60s.  

 I get what your saying... I know people who will work every day of their life regardless of what's in the bank.

I would be split it up across a couple property types, but I would love to put 100k into buying a Dive bar.  Just think how much fun you could have with your own ghetto dive bar.  $1 drafts, and microwave pizzas! 

@Deren Huang I'd buy a few day care centers, invest in a some doctors/dentist/vet practices, and maybe some Jimmie Johns franchises (because who doesn't like Jimmie Johns?)

Also buy the buildings that held some of those business. 

@Deren Huang Depending on your age, you would do 40/30/30 strategy. If you are in your early 30s, 40% in equity, 30% in short term bond (liquidity), 30% in real estate and inflation protected assets such as gold. 

It's always good to diversify your return streams.

double tax free AAA muni's 

other wise HML in SF bay area SF to las Gatos that would only be 5 to 7 loans a year.. not too much work.. make 8 to 9% with not a lot of drama. just need to be careful in picking the borrower... but that those levels the borrower will have 1 to 2 million in cash skin in the game.. so you do mitigate the risk.

With 20M I definatly would not be working anymore. 20M is way more money than any normal person would ever need. With that much money working at investing is a waste of both time and energy.

I would put it all in secure guaranteed investments, extremely low risk/low returns but with 20M in equity who cares. It would finance the rest of my life without ever touching the principal.

If I had $20 million I would continue commercial development.  Go straight into land development to develop different asset classes.  Would be able to build at cost to maximize long term hold returns.

Originally posted by @Thomas S. :

With 20M I definatly would not be working anymore. 20M is way more money than any normal person would ever need. With that much money working at investing is a waste of both time and energy.

I would put it all in secure guaranteed investments, extremely low risk/low returns but with 20M in equity who cares. It would finance the rest of my life without ever touching the principal.

Totally with you!

Another person mentioned in the post that he would just put it in a bond at 1%, said it was good enough for him.  

Yep, biggest problem wealthy people have is not knowing when they have enough. Surveys show that the more they have the more they think they need. Ultimatly they work till they die chasing the dollars.

Up side is their kids are happy when they finally kick off so they can liquidate everything and live like kings.

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