100k+ to Invest, what would you do personally?

Question

Say you had 100-150k to invest right now (as a downpayment) in multifamily (2-4 unit) or even more..where would you invest? Or would you even? Taking into account positive cash flow, maybe slight appreciation, landlord friendly state etc. Say you had some free time and can travel but not ready for a full on rehab just yet due to no experience. Would you just wait to see what happens with the market and if rates go down? Any info appreciated.

Francesca Zanzucchi · Answer

Personally, I am focusing on light flips with seller finance options in Arizona. Projects that only require hold time for 4 - 8 weeks with a 15% min ROI are the sweet spot. Here are some pro's I have found with this approach:

1. Seller finance allows you the ability to get "lending" for a project without having to pay 10 - 11% interest like you would with hard money and the down payment required is typically the same.

2. The length of the project allows me to exit the deal quickly. The last spot I want to be in is halfway through a 6 month flip when something in the macro environment breaks and drastically changes the housing market.

3. It's relatively low risk. I will not touch a project that requires large improvements like removing walls, reconfiguring floor plans, repairing foundations/plumbing etc.

4. I have the option to do a cash out refinance and hold the property if it cash flows on the monthly rental rate.

Obviously, this is a hands on approach that requires my involvement and supervision but I find it enjoyable and rewarding. Here if you want to chat through anything.

Looking forward to hear what you end up doing. Please keep us all updated!

Account Closed · Answer

equities and btc

David Lilley · Answer

@Alex Clermont it stands for Limited Partner which used to be the only legal term to describe passive investors until Limited Liability Companies (LLC) were created in 1977. Now, LLCs are the most prevalent legal structure in real estate and passive investors in these companies are actually called Members.

I would start by doing your own due diligence and market research to determine which states and cities have the best economics and growth potential; this is what we do and why we invest in Dallas, Tx. Once you identify where you want to invest, start Googling Real Estate Private Equity firms in (whatever city), or "multifamily syndication", etc.

Feel free to shoot me a DM if you have more questions.

Alex Clermont · Answer

hi question what does LP stand for and where does one go to invest passively as an LP?

David Lilley · Answer

You will learn a lot by investing passively as an LP first before going out on your own. Rates and values are inverse, so if you wait for rates to go down, you are essentially waiting for real estate values to go up.

Vijay G. · Answer

Great advice.. I would give the same advice invest in 50 unit bullding.

@Adam Bartling are you building 50 unit apt building ? what town ?

John B. · Answer

Do you have an example?

Adam Bartling · Answer

@John B. You asked the question what would "we" do, this has no insight into your risk adversity or growth needs.

What I would do is invest another 100K in a new 50unit apartment we are building Q3 and bump another investor and make more for me!!!

Justin Moy · Answer

@John B. Depends on what you want your role to be. No matter what anyone says, investing in real estate is not passive unless you're in a passive position (usually in a syndication, fund, or REIT). To run a property well you have to invest time. Although the time can be minimal in some cases, there's still time involved.

If you want to be totally passive, I'd look into one of the 3 above strategies and determine which you like the most. You'd have enough cash to invest in either strategy. DM me if you have any other questions about those, more than happy to discuss!

If you do want to be active I'd look at what market you want to invest in. I saw you're in FL, I'm not familiar but usually those really high targeted markets sacrifice cash flow for appreciation, so if you're looking for a higher mix of cash flow you might want to push your territory out a bit. Think of what your criteria is, some ideas may be:

Landlord friendly states that I can get a direct flight to and takes me less than 3 hours to get to.

This criteria alone can help you narrow down your markets to a select few.

From there, build relationships. Brokers, property managers, contractors, other investors. Start building your rolodex so you can find and secure opportunities as they come up.

Chris Seveney · Answer

@John B.

A fund which is not correlated to markets or interest rate hikes.

100k+ to Invest, what would you do personally?

100k+ to Invest, what would you do personally?

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