What would you do with $300,000 cash?

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Ian WalshBusiness Member
Lender 路 Philadelphia, PA 路 Member since 2016 路 2k+ posts 路 1k+ votes
6y

Pretend I don't have it and learn to make it in this business with out it.  It's extremely easy to lose that money.

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  • Kiera Underwood
    Real Estate Agent 路 Oklahoma City, OK 路 Member since 2019 路 956 posts 路 600 votes
    6y

    @Justin Gottuso I'd house hack a 4 plex in OKC once a year every year. I'd buy cash flowing rentals in higher risk areas. I'd likely over improve to target the higher-end tenants. I'd hope to lock down tenants that are willing to move into a bit sketchier areas in order to be closer to the developments nearby. I'd also consider buying more and just developing later when there were more rental comps in the area to support the higher rates I'd charge. 

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Kiera Underwood

    Cool! Have you house hacked before? What are your goals/what are you working towards?

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 路 15k+ posts 路 11k+ votes
    6y
    Originally posted by @Justin Gottuso:

    @Theresa Harris

    Awesome! I hope you reach and exceed your goals! How much income are you going for, what鈥檚 been your strategy on how to get there, where are you at now and what鈥檚 your next step?

    Keep in mind I live in Canada, so health care is very different plus I live simply, so with $3-4K/month I'd be more than fine. I just save and live within my means.  My next step is officially doing retirement planning which I am in the middle of doing right now.  I've already done some quick calculations.

    0Reply
  • Parker Eberhard
    Contractor 路 Seattle, WA 路 Member since 2019 路 339 posts 路 325 votes
    6y

    @Justin Gottuso you can also make a substantial amount of money in the art market. My inlaws, for example, purchased a Christopher Wool painting for $12,000 and later sold it for over $1million..not a bad return

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Theresa Harris

    Sounds like a plan! 3-4K per month goes a long way. Has the BP community been helpful in your planning and expanding your knowledge?

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Parker Eberhard

    Phew! Beauty is in the eye of the beholder. The value one person at one time places on something can be incredibly different than the value another person gives it at another time! Good for them!

    0Reply
  • Robert EllisBusiness Member
    Developer 路 Miami, FL 路 Member since 2014 路 3k+ posts 路 1k+ votes
    6y
    Originally posted by @Justin Gottuso:

    @Jaron Walling

    Thanks for sharing! Yea, I鈥檓 thinking of diversifying beyond RE, keeping solid emergency fund and keeping our own expenses low, then save as much as we can (leaving Los Angeles for Columbus, Ohio and looking forward to less chaos and stress so we can focus on our family and learning about RE and building wealth over time)

    But then also keeping x amount for investment properties. I like the idea of paying cash for one or two properties in the 50k range and growing from there. Or put it all down on a larger multi family, maybe with some partners. Still exploring options and gleaning from other people鈥檚 wisdom :-)

    there are a lot of options, i'm selling a 4 unit to a cali buyer cash and he's refinancing within 60 days, BRRRR deals so he can cycle his cash the most possible. that's what i'd focus on. build up maybe 20 units or a little more and sell the whole package and do a 1031 exchange.

    [email protected]786-494-6766
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    2Reply
  • Joseph CacciapagliaBusiness Member
    Lender 路 San Antonio, TX 路 Member since 2020 路 1k+ posts 路 1k+ votes
    6y

    I would buy infill lots here in San Antonio, and build for sale affordable housing with shipping containers. This is actually my long term goal here in town, but my cash position won't allow it just yet, and it's too speculative for me to want to use OPM. I'm much more conservative about that than many others on here though. There is one other investor that's executing this strategy with significant ROI, and I think there are several ways to improve on the model.

    However, that may not be a great strategy for you. Depending on your risk profile, experience, and time line, some of the other suggestions probably make more sense. I don't particularly like the idea of sticking it all in one multifamily deal, unless you have other chunks of cash for some diversification. I don't think you need terribly wide diversification, but betting the farm on a single transaction is a bit much. Again, I'm probably more conservative than most. I saw too much of the ugly side of this business in 2008+. 

    [email protected]979-218-2286
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    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Joseph Cacciapaglia

    Great idea of the shipping containers. I love the idea of developing new communities. ancestors on my moms side of my family started multiple new towns in the 1700 and 1800鈥檚. It鈥檚 a dream of mine to do the same one day :-) keep the dream alive!

    1Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Robert Ellis

    Great 馃憤 Yea I鈥檓 interested in seeing the whole process/ big picture/our goals and then the steps to get there. Good to see your thoughts on this with a practical example from a client in a similar situation.

    0Reply
  • Michelle Coffee
    New to Real Estate 路 Asheville, NC 路 Member since 2019 路 3 posts 路 1 vote
    6y

    @Joseph Cacciapaglia. My long term goal is to create a community of tiny houses. I figured I needed to learn the ins and outs of REI before jumping into that.

    1Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Michelle Coffee cool!! 馃槑 where do you want to have the tiny house village?

    0Reply
  • Michelle Coffee
    New to Real Estate 路 Asheville, NC 路 Member since 2019 路 3 posts 路 1 vote
    6y

    @Justin Gottuso.  I'm not sure where.  I am currently living abroad, so I can go where ever it makes sense.  In the US, that is. Like I said, it is a long term goal. So at this point, I only have a vision of what I want.  The issues I would like to address are affordable housing, minimal/sustainable living, and strong sense of community.  

    0Reply
  • Ryan Proffit
    Saint Joseph, MO 路 Member since 2018 路 401 posts 路 244 votes
    6y

    @Justin Gottuso I would buy 1 or 2, or however many it takes to use that 300 up as a dp of 5+ unit multi family. Find some that are mismanaged and force appreciation. You still build wealth through debt pay down, but you can increase equity on a much quicker scale.

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Michelle Coffee

    Cool! Do you have a home base abroad or are you traveling to different places?

    I also love the idea of providing affordable housing and a strong community

    0Reply
  • Philippe SchulligenPro Member
    Investor 路 Atlanta, GA 路 Member since 2016 路 57 posts 路 29 votes
    6y

    Here is a blog article that I have just posted that attempts to answer the question Guide to Find the Best Investment Option for You

    I hope it helps!

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Ryan Proffit

    Thanks!

    0Reply
  • Kiera Underwood
    Real Estate Agent 路 Oklahoma City, OK 路 Member since 2019 路 956 posts 路 600 votes
    6y
    Originally posted by @Justin Gottuso:

    @Kiera Underwood

    Cool! Have you house hacked before? What are your goals/what are you working towards?

    Yeah, it's going well so far! The goal is to utilize all 10 conventional loans on 5% down deals that cut my living expenses and quickly translate to a rental. 

    0Reply
  • Michelle Coffee
    New to Real Estate 路 Asheville, NC 路 Member since 2019 路 3 posts 路 1 vote
    6y

    @Justin Gottuso, I travel to a different place every 3 to 6 months. I have to pay income taxes in the country I'm living in if I stay longer than 183 days, so I don't stay that long. It's been an amazing journey! But I'm tired of the work (I teach English online). As soon as I get enough cash flow from investing, I will quit working and work full time on investing activities. I have a chunk of cash, so I'm learning how to best use it for generating cash flow. The tiny house community as it stands right now seems too risky as a source of income. But it is my dream. Ideally, I can get enough income and equity from buy and hold properties from small multi unit properties, using BRRRR strategy, that I could use a large portion of the cash I have to build the community as a passion project, so to speak.

    0Reply
  • Bob Prisco
    Specialist 路 Cleveland, OH 路 Member since 2018 路 1k+ posts 路 666 votes
    6y

    @Justin Gottuso buy rental props with 10% net caps are higher,, Refi, buy more, rinse and repeat

    0Reply
  • Bob Prisco
    Specialist 路 Cleveland, OH 路 Member since 2018 路 1k+ posts 路 666 votes
    6y

    @Justin Gottuso buy rental props with 10% net caps are higher,, Refi, buy more, rinse and repeat 

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Philippe Schulligen

    Thank you for the link to your article. The chart was helpful to see how commercial properties out perform other investments. I also read your one on the step by step updates to investors which was helpful in seeing the process works on acquisition. Do you know of any statistics on how often syndicated deals actually perform over time? Promises of doubling your investment in 5 years/15-20% returns seems too good to be true, yet also worth researching more.

    I think the economies of scale of multi family and not having a single vacancy or repair eat up all profits in a year are very good reasons to go with larger multi family units. I鈥檓 interested in doing this in Columbus/Central Ohio ideally.

    What did you do before your first syndicated deals? And what experiences and knowledge are essential to being successful as a Sponsor of a syndicate? What do you recommend investors look for in a syndicated opportunity and what to avoid/bad signs? Thanks!

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Bob Prisco

    Thanks! Simple and from what I've read, a great way to become successful in REI. In LA caps are 2-3% mostly so I'm glad to be in Columbus Ohio/Midwest now where 10% is achievable. I look forward t visiting Cleveland sometime too!

    0Reply
  • Philippe SchulligenPro Member
    Investor 路 Atlanta, GA 路 Member since 2016 路 57 posts 路 29 votes
    6y
    Originally posted by @Justin Gottuso:

    @Philippe Schulligen

    Thank you for the link to your article. The chart was helpful to see how commercial properties out perform other investments. I also read your one on the step by step updates to investors which was helpful in seeing the process works on acquisition. Do you know of any statistics on how often syndicated deals actually perform over time? Promises of doubling your investment in 5 years/15-20% returns seems too good to be true, yet also worth researching more.

    I think the economies of scale of multi family and not having a single vacancy or repair eat up all profits in a year are very good reasons to go with larger multi family units. I鈥檓 interested in doing this in Columbus/Central Ohio ideally.

    What did you do before your first syndicated deals? And what experiences and knowledge are essential to being successful as a Sponsor of a syndicate? What do you recommend investors look for in a syndicated opportunity and what to avoid/bad signs? Thanks!

    Thank you for your feedback on the article, I am glad it helped. 

    I don't know of global statistics on syndication performances. Every deal and every type of deal (ex. stable vs. value add) will offer different returns on paper and each deal may hit these numbers or not. I can only recommend to ask sponsors for their track records. We can discuss my experience offline. 

    I don't know the Columbus market, but it is decent size for its MSA (Market Statistical Area): 300,000+ people. I would certainly recommend not going below 200,000. For selecting you market, you may also want to look at population / job growth and major employer diversity. When broker prepare an property offering memorandum, they include information about the market and sub-market that you can double check on the web easily. 

    My background is the aviation industry, with a degree in engineering. Besides books, podcasts, etc. I learned about multifamily and syndications taking a course and more importantly I had the opportunity to partner and be coached by experienced multifamily syndicators. 

    Looking at a syndication opportunity, the experience and track record of the team involved (both sponsor and property manager) is probably the most important factor: ex. 1000+ doors minimum and several deals in the market where the property is located. A note: very experienced syndication groups tend to close the door to non-accredited investors and place the minimum investment to enter a deal at a high level.

    P.

    0Reply
  • Justin Gottuso
    OP
    Rental Property Investor 路 Columbus, OH 路 Member since 2015 路 184 posts 路 162 votes
    6y

    @Philippe Schulligen

    Thanks for the thoughtful reply. Like anything, education/research, relationships/mentoring/training, and experience/tile behind the wheel are three foundational elements to being excellent and successful.

    I got your message and look forward to connecting more.

    0Reply
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