Have about $400K to invest which is the best realestate investment ?

Question

Have about $400K for investment, which is the best realestate investment probably with a leverage of 3x (LTV 30%), I am new to the real estate investment , i had been doing lot of research , unfortunately i couldn't choose one type of investment, which is i wanted your advise from your experience, basically looking for 10% CAP , less risk , i am a   passive investor  as i have a fulltime day job , any investment idea will be greatly appreciated ?

Bill Gulley · Answer

My advice, just because you have a little money doesn't make you a player in Real Estate, there are people that know what I know that would clean your clock! Invest in what you understand and know.

Don't walk into RE thinking that money will make you a winner, it takes knowledge just like anything else.

Go see a professional, maybe a broker with a good reputation and get advice before you invest. :)

Uwe S. · Answer

Raja,
thats your first post here so welcome to our BP world, I don't want to tell you here about your investments but will give you a warning: "Don't write in an official forum how many funds you have to invest".
Some other lurker is glad for this information.

-Uwe

Dale Osborn · Answer

Asking others to find a good deal for you sounds like a plan for you to possibly lose everything you have saved for. What works for me or other investors may not even interest you. You have to make many decisions on your own without biased input from others. Decide on the area you want to invest in. Decide on what types of properties interest you, etc. All these decisions will point you to what you are interested in.

Account Closed · Answer

Walking into the lion's den.

Rich Weese · Answer

I'm sorry, I just have seen too many crooked mentors that only have their pocket in mind. I would suggest study on your own  and be careful. Mentors have gone bankrupt selling their programs also. I've seen references that were people in the tank-even some here on BP. Just be careful, very careful and start SMALL and learn for yourself. Real Estate has been around a long time and will continue to be available-for ever. Rich

Eric M. · Answer

Maybe Joel has some good deals in his area, but in mine you can't get a low risk, quality commercial property at a 10 cap...more like 8 tops.  And then getting a 70% LTV loan isn't a piece of cake.

Crandall Myers · Answer

The best Real Estate investments right now would be partnering in on storage facilities. Also you should become a Private money lender and that would give u a more diversified portfolio. I have been in real estate for over 20 plus years and I have done it all and I have found that partnering in on storage facilities and loaning private money on deals is less headache and more lucrative in the market right now. Stay away from the informercial gurus ripping people off. Most of them are getting rich off selling people false hope. I learned the hardway but I still made it to the top. Find some body who is in the trenches doing it and not printing books talking about it. Well i hope that I have helped you in some way. Godbless and see u at the top.

Jeremy Cyrier · Answer

You might want to consider investing with a partner since you are looking for a passive investment opportunity. There's a steep learning curve in commercial real estate investing and I wouldn't want you spend $400k on your education. You can get it for much less some other way.

Joel Owens · Answer

Multifamily you can get in with 75% LTV and on top of that lenders will let a seller hold a second of 10 to 15% thereby increasing your leverage into a larger property with more upside (of course bought correctly).

With triple net you can get in as little as 5% down on certain properties like a pharmacy with a brand new lease in place but you will not get close to a 10 cap.You are getting ultimate security for  your money versus other RE investments so the CAP reflects that.

Those type of properties are more annuity type properties that you hold long term to be paid off for retirement.

If you want yield in triple net and good rent bumps you go for restaurants etc. but those require more down  (around 20%) bbut purchase price is lower as lenders have less appetite to fund those.

Every asset type has pluses and minuses.This is why you research and then go after what you discover fits your plan and comfort level.

I have some clients that love multifamily and some that say they do not care what the returns are they want triple net.It is doing more than sitting in their bank account or CD rotting away with dismal returns.

Investors overseas buy over here getting an 8% secured return and think they have won the lottery compared to the civil unrest and in some cases very high costs of properties for the return where they live.

The question for an investor is do you want urban core,suburban,or rural properties? All have good and bad areas.If you go urban core  you will be competing with the big institutions driving caps down to be ultra safe.

Suburban you get the big boys sometimes that get tired of buying urban core in an over heated market.Rural areas you are competing with mostly local investors and people willing to take on a little more risk for the extra yield.

Have about $400K to invest which is the best realestate investment ?

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