How would you invest $100k?
Hey everyone. I have recently decided to start investing in RE in the PA market, ultimate goal is to achieve Financial freedom in 10years by way of rental income. Ironically, the same week I started looking at small-multi properties I found out I am receiving a $100k inheritance from a relative that passed away. For the more experienced investors out there, what would you do with the funds in order to achieve my goal of freedom in 10years or perhaps even less now. Thanks in advance.
Where in PA and why? (There’s no wrong answer, I’m more curious).
There’s so much we could dive into but the most important thing is diversification. Do not put $100k into a single property if you don’t have a good portfolio of stocks/savings/[bad] debt free.
It would help if we had a little more details to your personal/financial situation above and beyond the inheritance…
I live outside Philadelphia, PA. If you're in the area, let me know!
There are tons of different Real estate niches. My favorite are real estate notes. You get the benefits of cashflow without dealing with property management, tenants or repairs. Because of this performing notes are more passive than a rental property.
Hey @Nick DiFinzio - If I were you I would get started with some type of House Hack. Gives you the experience of being a home owner, landlord, tenant, business owners, etc. all in one transaction. Also, since you would be an owner occupant you'd have more favorable lending options than an "investment property".
I'm going to second @Noelle Carter. If you're looking to build an active real estate portfolio, a house hack is one of the quickest and most effective ways to jump in a cut your teeth.
I'm sorry for the loss of your relative, good on them for being great with their finances. Do you have any consumer debt? (debt that doesn't result in more money? Cars, credit cards, boats, bills etc.)
If you do, I would pay that off, then take whatever is left and place in a high interest savings account until you find a property, I use Marcus by Goldman Sachs.
Next decide if you want to be an active or passive investor in RE. Once you've decided that, if active, find a deal that makes sense and do it, IMO, multifamily is more scalable than SFH.
If passive, find sponsors and vet them.
I hope this helps!