Just sold one of my houses, debating on what to do with the money

[Jack B.]

I had lived in the house for 2 years. I put down about 100K and am walking away with about 300K, 100K of which is my down payment, give or take (rounded numbers for ease of discussion).

I just moved into one of my cheapest rentals and have three other rental properties, two of them still seasoning since purchased last year via 1031 exchange. The other one is ripe for the picking this year or next. So I have 4 houses and 3 rentals now.

Question is, what to do with the 300K? I have more money besides that sitting liquid but for now, just thinking about the 300K. Options are:

-I could buy 3 more houses with the money from the above noted sale and make cash flow and appreciation like I was from the house I just sold. Keep growing the portfolio. In about 4-5 years I plan on taking all but one house here in Seattle and 1031 exchanging for more properties in Las Vegas to formally retire.

-I could diversify and keep the 300K to further pad my funds for the next crash.

-I could do a combination of the two and buy just two houses instead of three with the proceeds and keep the 100K left over.

-I could buy two houses and use what's left to pay off my primary residence. Hesitant to pay it off since it would only save me $250 a month in interest payments and is not tax advantaged if I turn it back into a rental again. But perhaps from a qualitative perspective paying the house off is the best thing to do.

-I could put the 300K into the stock market (VTI index fund tracking the S&P 500).

-I could take my pool of cash and pay off my portfolio and have nearly 5K a month cash flow, buy an RV and travel the US like I would love to, still able to save 75% of my income at that point even in retirement.  :-) Though right now I'm still working to add funds for the next crash; I'm saving my six figure take home pay now that I am living in my el cheapo house and living off my rental income. Just good to know I have that option. :-)

Note:

In a few years I plan to move to Las Vegas. I am not sure about buying property there right now because it's difficult to manage from here and not enough cash flow to justify property management. It's something I've thought about but I think I'm better off buying locally for now still. If I keep buying houses in the area now via 1031's, I'd have 7 houses to 1031 (keep one house here as a base) into 14+/- properties in Las Vegas before I retire.

Whether I put they money into index funds or more rentals, I am now officially FI (again)! I was buying bigger and better deals so as my expenses pushed me out of the FI column for a few years but it all came together full circle. Now living in the second house I ever purchased and am enjoying not having a crushing mortgage anymore...

[Steve Vaughan]

I have the same issue.  Glad you paid off your student loan.  I paid mine off when down to a balance of $7500. No biggie, right? It was 13 pages on my credit report! Every individual loan every quarter or semester listed individually.  Back when I was borrowing, lenders couldn't figure out how much it was and it was messing me up.

I am also paying down some RE debt. I have some old commercial (now private) loans at 6% & 6.5%. Easy decision when RE is frothy.

I moved my excess excess (above reserves and principal paydowns) into Vanguard and am safely earning a ton more in their s-t govt bond mm fund than I was in the bank.  Index funds to me are just buy and hope, especially at these levels.  I want specific stars at specific support levels, but that's just me. I have been doing well and don't miss getting more rentals at all. 

No stock has yet moved out, call with drama or repairs, needed maintenance, etc.  I like me some truly passive gains and will stick with paper equities I think unless an RE deal falls in my lap.

 Congrats, Jack! Good problem to have!