What would you buy with $300k?

Question

Hey bigger pockets community! Here goes my first post! My husband and I will have about $300k to leverage in the next 2-3 months. My thoughts are to put into our non-qual investment and then leverage as a fully secured loan with an interest rate of about 5.25%. We would plan to use that as down payment and renovation money, then let the property pay for itself and that loan. Thought? What would you try to buy? We would like to keep in the eastern NC market. Thanks for any insights!

Jaron Walling · Answer

@Kayley Neri That's a lot of money and utilizing it affectively really depends on your strategy and market numbers. What strategy within REI do you want to follow? What are property prices in your target neighborhoods? Eastern NC where? How hands on do you want to be? Best to answer these questions before moving money, leveraging, and playing the game.

The best way to preserve capital is using the BRRRR method. You can search in forums and find about 10M threads about it. Long story short it's a catch phase that investors have been doing for years... buy distressed deals below market, remodel, increase ARV, refinance, and repeat. In theory it sounds simple but in real life it's challenging. It's probably the most hands on strategy for new investors. My first house was a combination of the live-in flip/BRRRR. I gained so much free knowledge by reading these forums, avoiding pitfalls, and learning the NUMBERS. If you're not confident with numbers, finding/hiring contractors, estimating rehabs, and making low offers it's probably not for you.

There's other less hands on strategies. I'd read and learn about them for spending any money. I wouldn't partner or get into a syndication deal. I wouldn't do anything "advanced". Just stick with a basic SFH, duplex, or tri and hit the ground running after doing the market research. Cheers!

Ray Hage · Answer

If you can get a great multi-unit that would do well as a STR/MTR, I would go for that. It will depend on your specific area and market. To get a good interest rates, you'll be looking at about 25% down. You could do less with a DSCR type of loan. I would look at some properties in the overall NC market and see what's out there. Be patient at this time as prices should be coming down a little but if you see something where you can really do a big value-add, go for it.

Kayley Neri · Answer

We’d like to get into smaller multi family I think. We just purchased our first rental, a single family, and it’s got a tenant now. It was close to done, just replaced roof, cleaned and painted. Due to our crazy work schedules, we definitely need a strategy that we can deploy a team to handle, and I know that cuts into the bottom line. I’m happy to have a longer horizon. I would love to find a small multi that we could air bnb, as that does well in this area. I don’t know if we should be thinking bigger though. House hacking not currently an option either. There is also very little inventory for the most part, but we have only been exploring this for a few months now. Thanks!