Where to invest 100k?

Question

We have a home and a mortgage about 4k a month. We have about 100k cash in the bank.

Where should we invest? What you think?

- down payment for a 500k apartment in a prime location and rent it out. Short term or mid term.

- buy a single family house away from city for flipping

- buy multiple properties in a city like Detroit and give it to property management companies for rental.

- inves in stock market

- keep cash

- put the money in current mortgage to reduce  monthly

Thank you!

Travis Biziorek · Answer

Like @Jamiel Strickland said, what are your goals?

Investing in your education is overrated, at least in the traditional sense. There's so much free content available that you'd be silly to pay for courses, seminars, etc. Read everything you can, but not so much you don't take action. When you start hitting diminishing returns from research, get out there and do a deal. You'll learn far more from doing than you will with a course, seminar, or just reading forums and articles.

Also, putting money into your current mortgage won't change your monthly cash flow unless you refinance on top of it. All it would do is change your payoff date.

Jamiel Strickland · Answer

@Cihan Sahin,

If you come more than willing to meet and get coffee. Google is expanding but even more flippers and investors that helping to turn around the city. I message you a good realtor to work with. Detroit is better cash flow market than appreciation but lately I have been seeing homes values increasing more than anyone thought!

Said Aliyev · Answer

Seems like so many people on these forums like to give advice on everything other than the initial question. Cihan isn't asking anyone here if you think he should move or whether or not to invest in education. Furthermore, we do not know his income and if 4K is a reasonable mortgage or not. Maybe he makes 400k a year and likes where he lives... Those answers are besides the point and are not relevant.

If you have never invested in real estate I would not start with 100k. Especially if that is your entire "backroll". You can easily start with half and look into markets like Detroit (I have also been looking there), Indianapolis (Good market-I have done many deals there), or others in the Midwest.

Flipping houses is not as simple as it seems, a lot can go into doing that especially in competitive markets where margins can be thin.

Rentals are easier in my opinion especially if you are satisfied with purchasing a home and getting back 7%-10% in returns.

Simply put, you can purchase a house for 100K, putting down around 25k and still cash flow depending on location and rental prices for the area. I would start there and see how it goes.

Cihan Sahin · Answer

Thanks @Jamiel. I can come to Detroit which I have heard from many others as well. I heard Google is about to expand there also. I don’t know much about Detroit and I am far away but if there are good real estate agents and property managers that I can work with remotely please let me know...

You asked about my goals. I don’t need a lot of positive cash flow in the short term, I am more interested in longer term appreciation. Around 4-5 years. If I put this as down and the rental income pays off the mortgage and I know the property is appreciating than I would be happy...

Taylor L. · Answer

Invest in your education first. At the risk of sounding rude, but with the best intentions, you should strive to get your real estate knowledge to the point where you can make this decision on your own.

What's your goal? Start there and work backward. For most folks, a $4k personal residence mortgage is way more than they can actually afford while pursuing financial independence, so a good first step toward financial freedom would be to downsize and cut that expense significantly, so as to invest more in cash flowing real estate.

You may want to look into syndications. Syndicators will handle the work for you while paying you a return. Most busy professionals already have enough on their plate without managing rentals. Property managers still need management to keep them on track.

Jamiel Strickland · Answer

@Cihan Sahin,

If you come to Detroit, easily cash flow and have a good rental portfolio. I am not sure what your goal is to investing but if done right you can do well here.

Christian Hutchinson · Answer

with that size of mortgage, I would be trying to move, and then invest in RE.

Otherwise, just put your money in an INDEX Fund

Where to invest 100k?

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