How would you invest $100,000 in today's climate?

40 Replies

Hi everyone.  In an attempt to try to stop my analysis paralysis, curious as to what established investors would do in the following scenario:

$100,000 liquid

No Debt at all

Remote IT Job making 100k/yr.  Location is a non issue.  Can move anywhere or stay put.

No family or anything holding back from making drastic moves.

What market/strategy would you use the 100k for buy/hold purposes in today's climate?

depends on what your looking for.. and want to acheive.

most folks on this particular site are geared toward owning rentals.. which is a fairly easy concept to understand and pull off.

However there are many other avenues to make money in RE if you dont particularly care to be a landlord.

And Frankly some small business you could buy will renturn far more than any rentals would given the same capital

Curious to hear what people have to say as im attempting to start my portfolio as well and I know its all about getting good deals and not about the market however, im not going to lie...i don't want to make bad decisions before a probable downturn.

Midwest city like Indianapolis, KC or Cleveland.  Up and coming neighborhood near something really desirable.   5 down payments at 20k each on 100k houses.  Power the notes down, pull equity and buy more.   Keep it simple :) 

@John Smithe my first question is what other assets and investments do you have. As much as I am a proponent of real estate, I also believe in having a diversified portfolio and not having all of your eggs in one basket. The first thing to do is establish a clear objective. If it's cash flow, quantify it. How much cash flow do you want monthly? What kind of CoC return do you want? Once you do that, then identify the markets that will best get you to those objectives. If your goal is cash flow, you'll find the Midwest and Southeast are generally the best. Personally, I like Indianapolis and Kansas City. The key is to get past the analysis paralysis and choose a market. I've seen would be investors compiling data and analyzing spreadsheets for a year or more and still never do anything. There's no such thing as a perfect market but there are several very good ones. Pick a good one and move forward. Feel free to reach out if you want some help.

Given the market is probably near the top, I would do so carefully. I wouldn't be in a rush to find a deal. Make sure it's a really good one. I wouldn't avoid using debt necessarily if you want to go that route as rates are still pretty low though.

@John Smithe I would invest in the types of homes and areas much like @Ryan Mullin mentioned and be sure you have multiple exits (rent, refi,   However!!!  I wouldn't buy retail.  I would buy low, rehab, rent, refi, repeat.  This makes your capital go further and protects you in a market decline or the need to flip a property.  
OR buy a MF unit (second option), partner up with others for a larger deal (third option).

How would I invest $100,000 in today's climate?  Well, I'd start by making sure I wasn't being rude towards seasoned investors who gave me good advice, especially considering many of them are making 3x to 10x more than $100K yearly and know what they're talking about.

We discussed this same topic about 2 weeks ago.  @Caleb Heimsoth 's advice was spot on.  Couldn't find anything recent?  Refine your search criteria...a tip from one IT Pro to another.

@John Smithe   I applaud your discernment.  One close person to me spent over 30 years studying and never pulled the trigger on an investment out of fear of failing.  It wasn't the failure that was the issue, it was the perception that people would see the failure.

So, to answer your question, I would suggest defining your goals.  Based upon those specific goals, develop a criteria to meet them.  Research that market, and then know you have the confidence to proceed based upon your due diligence.

My criteria may be completely different that yours.  This past year, we have made major shifts in our strategy based upon the market conditions we are observing.  I believe we are at the peak of the market so, we are looking for under served market conditions.  Ours is a longer term strategy that is 3-5 year plan.  That being said, we have based the plan on lots of research, observations, and experience.

Once, we have made that decision, we are going hard after it!  

@Scott Krone , thanks for the great information. Im in a bit of a whirlwind as my initial plan was thwarted. I was looking into investing in a quad that I could house hack. Then in the FHA year I'm in the area , I would build a team and pick up some SFRs where I would then vacate the MFR and continue working with the team to continue building a portfolio from afar.

However, I talked to a lender and learned that FHA won't approve a loan if you don't already live within 90 miles of the property. Even if I could prove that established residence in the unit is no problem. So that plan is a bust.

Its hard for me to decide if I want a stable cashflowing market like St. Louis or Kansas City or a cashflow/growth hybrid like Tampa or Orlando. I'm leaning towards stability since I, too, believe we are near the top of the cycle. Either way, looks like ill have to either rent and establish a residence first or buy a fixer upper and live there for a few months while working with contractors to get it ready while looking for a MFR in the area.

Lots to think about.  I really want to be in the area the first few deals so I can get hands on experience.  Doing it all from afar seems daunting.  Thanks for your input.

@John Smithe - seems you have a well thought out plan and strategy. Why is your plan dependent on FHA financing. Look for other means of financing. Once it is stabilized you an can restructure the debt.

With respect to Midwest or Florida, I think it would be wise to assess the risk level of both and then adjust the rate of return based upon the risk/reward.  My relatives live in Orlando, and find it hard to buy appropriately based upon the high speculative nature of that market.

Good point. I guess its not absolutely dependent. I just thought it would be a good way for me to get a sizable loan on 4 units for a small amount down giving a good COC return to start out strong.

Originally posted by @Erik W. :

How would I invest $100,000 in today's climate?  Well, I'd start by making sure I wasn't being rude towards seasoned investors who gave me good advice, especially considering many of them are making 3x to 10x more than $100K yearly and know what they're talking about.

We discussed this same topic about 2 weeks ago.  @Caleb Heimsoth 's advice was spot on.  Couldn't find anything recent?  Refine your search criteria...a tip from one IT Pro to another.

I cant never find anything on the search function how do you do that.. you IT pro's.. i cant even find other members when i try.  the list comes up with hundreds of match's and I don't have the patients to scroll through them all..  just wonder how you guys make doing a serach sound so simple when i cant even do a basic one..

But if the only option is to invest in real estate.. right now great performing notes could be a good option.. Also i know of some nice REG A offerings that are real estate collateral based that allow 50k minimum and you DONT need to be accredited and they have a 30 day call period.. I would personally start there.. make income while you shop.. and re fine your wants/needs.


this is not my company and the mods don't like advertising.. so if you want to hit me off line I can send you their contact info you will want to talk to the director of investor relations..  its pretty cool though 30 day call is very nice..  

Agree that the search capabilities of BP are pretty crap, can't find much of anything even when I know for sure it exists, like I just read it yesterday and want to find it again.   So if there are any tips to get search to provide anything useful I'm all ears.

OP didn't mention what your time horizon is, how long do you want your money tied up?  If you are accredited, you should look at syndications.  They are passive, returns can be better, no tax write off's though.  It really does depend on your situation and your goals. 

Originally posted by @Tim S. :

Agree that the search capabilities of BP are pretty crap, can't find much of anything even when I know for sure it exists, like I just read it yesterday and want to find it again.   So if there are any tips to get search to provide anything useful I'm all ears.

OP didn't mention what your time horizon is, how long do you want your money tied up?  If you are accredited, you should look at syndications.  They are passive, returns can be better, no tax write off's though.  It really does depend on your situation and your goals. 

see I am not the only one you guys are all way smarter than me.. and if you cant do it I certainly cant..  

@John Smithe

I would do similar to @Jay Hinrichs ' suggestion with a modification. I'd passively invest $50k in a deal that was the asset class I thought I wanted to buy myself. See how the active investors or GP structures and executes the business plan, and implement what I learn into my own business, which is where that other $50k would come in.

Originally posted by @John Smithe :

Yeah @Jay Hinrichs , I agree.  Tried different keywords with nothing recent or relative to what i need.  Erik is clearly looking for a reaction and not going to go down that road

Try using google for your research of this site. Tons of old goodies to be found.

Google site:biggerpockets.com your keyword