What should we do with $500,000 cash borrowed at 3.5%?

My partner and I are completing cash out refinances of some properties where we will have at least $500k cash to invest. Market is hot and I haven’t seen anything I’m excited to buy. I don’t have a lot of spare time. We recently both became accredited investors. My recent investments have been in single family homes near to me. I would love to buy an apartment building or other commercial asset but they’re all very expensive. Trends in my area are negative - sort of - lots of people are leaving New Jersey yet we are also experiencing LOTS of new apartment building and the job market is pretty solid between government and pharmaceuticals. I’m not sure if I should just throw it all in the stock market (which is also at record highs but my portfolio grew 20% last year just in S&P trackers where I did nothing.)

What would you do with $500,000 borrowed at 3.5% for 30 years?

There's plenty to buy.  You just have to learn different ways of doing it.

@Natalie Schanne first, I wouldn’t let the cash burn a hole in your pocket even though you are paying 3.5% on it. You don’t want to put it at unnecessary risk just to deploy it. Second, you are currently busy so you may not be in the best situation to learn how to optimize your investment to get the best return you can. So you may just want to put it into the stock market because it requires very little effort and you have already seen good returns with that. Or you could find a skilled operator with a good track record in syndication that can deploy your capital into apartment buildings. You may even be able to learn from them along the way when you have more time. Unfortunately I am not a syndicator nor have I done any syndicated deals. Although I do work with private money lenders on most of our real estate deals and we put them in our WhatsApp group so that they can learn about what we are doing and how we are doing it as they earn money on their private money loan that they have lent to us. It is a sort of earn while you learn program. So private money lending is another option.

@Joe Villeneuve - do you believe that prices won’t be lower in 2 years? I feel like this is 2005-2006 all over again. In 2009 I bought my first home for 255k and it had sold for 450k in 2005. Plenty of foreclosures on my street because all the homes had sold for 450-500k.

Originally posted by @Natalie Schanne :

@Joe Villeneuve - do you believe that prices won’t be lower in 2 years? I feel like this is 2005-2006 all over again. In 2009 I bought my first home for 255k and it had sold for 450k in 2005. Plenty of foreclosures on my street because all the homes had sold for 450-500k.

 Maybe they will, maybe they won't.  I don't buy RE like stocks....as in low, and then sell high.  I buy based on the terms.

@Natalie Schanne short term rental baby!

That's quite a nice chunk of change. You can consider a multifamily or investing in someone else's syndication - or across a few of them. 

Have you also considered note investing? 

That big of a chunk of funds, I'd suggest breaking it up into several multifamily syndication investments.  There are a ton of syndicates looking for cash.  Speak to a few of them to see if your goals align.  Specifically, are you and the syndication aligned on cash payout timeliness, types of property invested in and ownership rights.  

It is alot of money to entrust someone with, so start those conversations now.  It may take a while to find someone you click with.