Rental Property Investor · Lexington, KY · Member since 2022 · 25 posts · 15 votes
Me and my wife are coming into $1 million here soon. We do not want to "work" full time. If it's even possible, would it be a good idea to buy a multi family, hire a property management company and just sit back and collect cash flow? I don't know if I'm being to vague but I've never invested in real estate but I find it very very interesting.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y
Bad idea.
There are so many landmines for new investors making a big bet on their first property, particularly if they expect it to be zero work. I've seen many folks buy apartment complexes, throw a property manager in, step back, and expect the money to start rolling in.
Then come to find months or years later that the PM did a bad job and the property is now in horrible financial condition. Sometimes those folks end up losing the property to foreclosure, sometimes they manage to get out and recoup at least some of their money. Either way, it wasn't the mailbox money they were expecting.
Step back, take $100 and buy a few real estate books. Make a multi-year plan and do not bet the farm on one deal. Learn about a bunch of strategies and decide how active you want to be. If you want to be totally passive, take some time to research syndication and decide if it's right for you.
Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes
4y
Hello Alex Deters, you say you are a Rental Property Investor in Lexington. The Safest thing to do is to Buy your Home. You could make it a fixer upper and add some up front value or like I did, a Townhome in a like new or new Community with low HOA. Live in it for two out of five years and it is a Tax-free Sale of your Residence after that. No need for a Manager. During that first year you find another, maybe, fixer upper and you Rent that until you Sell you Homestead. That way you have a Tax-free Real Estate Machine for the rest of your life and you can manage one Rental very easily with good Screening of the Tenant and a Handyman. You have a Million, so, I would pay Cash for the Home and always make sure that you would live in any property you buy after that. You can move up to bigger homes if you want, until you get to the place where you want to downsize and really be in control of anything that is going to happen to your properties in the future. You have may different Passive Investments you can make with the remainder of your Money and you have Time to study all the different methods and results. I trade the ES Futures each morning for $100 to $500 an hour. You have QYLD Covered Call ETF that makes up to 12% a year paying Monthly Dividends etc.
Investor · Tucson, AZ · Member since 2017 · 394 posts · 178 votes
4y
@Alex Deters Congratulations on your success. Education is key in this space. If you really want to be passive, then probably buying an apartment building is not in your best interest. I would get educated first on the asset class and what is a good deal. Then I would research syndicators. Find an experienced syndicator who is well reputed and invest a small amount in their deal. The Hands-Off investor by Brian Burke is a great resource for passive investors.
@George Azita haha I was feeling the same way about it as you. But due to my inexperience and the advice of everyone here, maybe I should start small? Ideal situation would be to find an investor that would let me shadow them to show me the ropes but everyone says you should bring something to the table but right now I'm still figuring out how to get to the table.
After reading this post I became baffled, speechless, can't find one thing to say and decided to totally stop trying to help investors on BP.