what strategy for $300K cash?

Investor · Park City, UT · Member since 2016 · 46 posts · 15 votes

I've decided I'm going to liquidate my holdings (SFH's) in an appreciating market. I should come away with $300K. Would love to get seasoned investors advice on what they would do with the cash. i.e. SFH's package? MF property? Major metro area or tertiary market? It would likely be an out of state investment as my local SLC market is way too inflated for my cash flow goals. My goal ultimately is to work toward 10K/month net passive income. I realize I will get several diff't answers which is exactly what I'm looking for- to see all sides of the cube. thanks in advance.

0 Reply

235 views

Most Popular Reply

Abel Sng

DFW, TX · Member since 2016 · 58 posts · 68 votes

@Kate Weinberg depending on whether you want your cash flow to be active or passive you could become a passive investor in a MF syndication and probably fetch between 8-10% cash on cash annually. However, you typically have to be an accredited investor to participate. Message me if you have any questions! BTW, I used to live in Provo and miss Utah!

3 Reply

See this reply in the discussion

59 Replies

Jump to latestLatest

Sort by

Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
9y
Originally posted by @Joseph Bramante:

@Mike Dymski Her expected returns during a downturn depend more on where she invest (tertiary market vs MSA) and the type of investment (value vs yield). its almost an impossible question to answer since there are so many variables.
Hey Joseph. I feel it is possible to determine expected returns with syndication (within a range). If not, I do not feel it is a wise decision to invest in something that one does not understand.
0 Reply
Joseph Bramante
Developer · Houston, TX · Member since 2017 · 161 posts · 134 votes
9y
@Mark Robertson, for somebody who gets paid to provide a due diligence review of properties with no investment to lose if their wrong, telling a novice investor to find their own deals and figure it out for themselves isn't very good advice. They are much better off investing as a passive investor with a vetted syndicator their first few times while they learn the ropes. All it takes is 1 bad deal in this business to end your career and deals are won at the closing table. So if a novice investor over pays or buys a lemon, no amount of mentoring or advice will help them recover. Just have to sell it for a loss. As long as a syndicator is investing along side them, so both parties have something to lose, there should be no issue. I'm sure there is a forum on here about best practices for passive investors when it comes to syndicator compensation. Or atleast there should be to protect investors and provide some good knowledge.
@Mike Dymski Of course you can determine expected returns on a case by case bases. But you can't make a blanket assumption for all markets during a downturn. That was my point. Tertiary markets tend to be less volatile during a down turn however there may be less upside as well.
0 Reply
Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
9y
@Kate Weinberg, There are a couple of different ways to accomplish the goal you're pondering - converting 5 rentals into one or fewer larger MF properties.
The first and least expensive is to do exactly what you were contemplating - sell each one and do a 1031 on each. But with a twist. Coordinate your sales so that you can get some or all of them into their respective exchange accts so you can then combine them into one or more larger assets. The tricky part is coordinating between the identification periods and the 180 day exchange period for each.
But it is perfectly fine to exchange more than one property into a larger asset. The IRS is concerned with the amount you are buying not the number. this is commonly called a diversification exchange.
It will also work best if you can find a larger asset where the seller is either willing to sell contingent on your getting your other properties sold. This is not as much a unicorn as people think. the larger the asset the more patient the seller usually is. Also the seller could sell fractional portions of the property to you as each of your properties close.
The second option which is more complex in structure and somewhat expensive would be a reverse exchange. This is where the QI actually takes title to the new property in an entity called the "exchange accommodating title holder" and then holds it until your 5 properties have sold. then you use the proceeds to "purchase" the property from the QI and complete your 1031 exchange. Theres still some quirks of timing. But for the move into bigger things reverse exchanges can fit the bill quite nicely.
The 1031 Investor5140 Reviews
Website View Page
0 Reply
Mark RobertsonPro Member
Investor · Salisbury, NC · Member since 2014 · 314 posts · 386 votes
9y
@Joseph Bramante "for somebody who gets paid to provide a due diligence review of properties with no investment to lose if they're wrong"
What are you talking about??? I do not provide due diligence review or any property or investment. If you bothered to look, the site's members rate and review sponsors .. ie syndicators. Investors with actual experience with them rate them so newbies will have some idea or who they are dealing with. I stand by my statement that giving your hard earned money to random people that private message you or respond to a forum post is crazy.
I would also love to know who is paying me. Let me know, so I can go by and pick up my check.
0 Reply
Joseph Bramante
Developer · Houston, TX · Member since 2017 · 161 posts · 134 votes
9y
@Mark Robertson Ok buddy. Maybe I misunderstood your website.
Of course you have to watch for the vultures. But it is much easier for the average investor to sort out a good or bad syndication than it is to sort out a good or bad investment. With a syndication, there is a partner agreement and PPM that provides some protection. If they do it on their own, there is no protection. I learned so much on my first MF purchase and nearly lost a lot of money before i turned it around for a 207% return. But many of the lessons I was learning could have been learned safely as a passive investor while somebody else was in charge. I was running when I never learned to walk. Luckily I'm a fast learner :)
0 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
9y
Originally posted by @Account Closed:

@Kate Weinberg There is some simple math to do. $300k would get you 12 houses with a cash flow of $500 per house and a cash down in your pocket of $10k to $25k per house with the least risk using Subject To and Tenant Buyers.
This sounds interesting to me
How would you get 12 houses with 300k
Could you go through the numbers please in more detail?
0 Reply
Account Closed
Consultant · Phoenix, AZ · Member since 2017 · 152 posts · 23 votes
9y
Did you sell your real estate and invest the 300k somewhere yet? I was thinking you might go to a local hard money lender and lend money through them to investors. Here you can get 10-12% interest on short term notes. Granted 11% with a 1 yr term is only $2,856.97 monthly with a balloon, but it's something to think about.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.