What would the expert do with 100k?
New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes
What would the expert do with 100k?
Most Popular Reply
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
4yStep 1: Spend more time getting educated. You say you've been learning for the past year but based on the tone of your post I can tell you are not ready to deploy $100,000 of your hard earned money.
After that, you need to establish some goals. You could get into wholesaling, house flipping, short term rentals, long term rentals, or commercial. All of these options have different pros and cons. Think about your financial goals and risk appetite, then focus on a niche.
36 Replies
- Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes4y
Step 1: Spend more time getting educated. You say you've been learning for the past year but based on the tone of your post I can tell you are not ready to deploy $100,000 of your hard earned money.
After that, you need to establish some goals. You could get into wholesaling, house flipping, short term rentals, long term rentals, or commercial. All of these options have different pros and cons. Think about your financial goals and risk appetite, then focus on a niche.
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Andrea Diaz:
I have been learning about REI for the past year and just when I feel like I´m ready to get my first deal going, everyone keeps talking about how we are still in a seller's market and that we have seen better days. My background is not related to RE at all and I have no experience in the industry. My business partner and I do however have around $100k to start investing. Given the pool of experts that might be reading this, if you were us, what would you do?
Thank you for the time.
Identify your market. What are you looking for? Cash flow or appreciation? Start calling different lenders and seeing who has the best rates. I think there are plenty of deals to still be had. The only thing I regret is not buying deals. What if it just keeps going up and what if you look back in a year to seen it was not that bad?
You should check out Columbus or Cincinnati. Your money will go very far, you'd be able to pick up a multifamily portfolio and start getting cash flow/appreciation. Not to mention Ohio is a landlord-friendly state.
- Investor · Indianapolis Indiana · Member since 2022 · 15 posts · 32 votes4y
@Andrea Diaz Congrats on your journey so far, 100k is a lot of money!
I think first off, IMO you need to decide two things for yourself.
1.) Why do you want to invest in real estate?
2.) Do you want to be an active investor or passive investor?
Active: Finding the deals, underwriting them, putting everything together, executing the biz plan and managing the asset(s) afterwards. Passive: investing with another group and relying on them to all of this and be good stewards of your money.
I'd love to hear your specific goal for this 100k to better give my opinion. Nevertheless, I wish you the best in this new adventure!
- Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes4y
@Andrea Diaz, yeah, I kind of agree with both @Scott E. and @Steven Foster Wilson. You're question is so general. Someone who is ready to move forward knows what they are looking for for their first deal. That means educating yourself to the point where you can define the what, how much, where questions and then come back here with a more pointed question. My goal for my first few deals was to invest here where I live, I wasn't comfortable with long distance, and to be able to sell without taking a big or any hit if it turned out I didn't hit. That meant either a flips or BRRRs. That in turn meant that I needed to figure out how to find good deals on the MLS (that was possible back then) or through wholesalers or on my own. The meant I needed to look at a lot of deals on the MLS, network with investors and wholesalers and figure out how to market. And those things in turn meant other things.
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Larry Turowski:
@Andrea Diaz, yeah, I kind of agree with both @Scott E. and @Steven Foster Wilson. You're question is so general. Someone who is ready to move forward knows what they are looking for for their first deal. That means educating yourself to the point where you can define the what, how much, where questions and then come back here with a more pointed question. My goal for my first few deals was to invest here where I live, I wasn't comfortable with long distance, and to be able to sell without taking a big or any hit if it turned out I didn't hit. That meant either a flips or BRRRs. That in turn meant that I needed to figure out how to find good deals on the MLS (that was possible back then) or through wholesalers or on my own. The meant I needed to look at a lot of deals on the MLS, network with investors and wholesalers and figure out how to market. And those things in turn meant other things.
Yeah, start with the end in mind and work backwards.
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4yHi Scott, thanks for the input. My goal is to purchase multifamily homes and hold the investment for cash flow. I guess my question was more oriented to hear what would be your (the expert) play as a first time real estate investor? I´ve heard David answer this type of questions in the past and wanted to get an updated reply with the current market.
Quote from @Scott E.:
Step 1: Spend more time getting educated. You say you've been learning for the past year but based on the tone of your post I can tell you are not ready to deploy $100,000 of your hard earned money.
After that, you need to establish some goals. You could get into wholesaling, house flipping, short term rentals, long term rentals, or commercial. All of these options have different pros and cons. Think about your financial goals and risk appetite, then focus on a niche.
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @Blake Pieroni:
@Andrea Diaz Congrats on your journey so far, 100k is a lot of money!
I think first off, IMO you need to decide two things for yourself.
1.) Why do you want to invest in real estate?
2.) Do you want to be an active investor or passive investor?
Active: Finding the deals, underwriting them, putting everything together, executing the biz plan and managing the asset(s) afterwards. Passive: investing with another group and relying on them to all of this and be good stewards of your money.
I'd love to hear your specific goal for this 100k to better give my opinion. Nevertheless, I wish you the best in this new adventure!
Hey Blake!
I´d probably want to start as a passive investor, work a buy-and-hold portfolio strategy for long-term investments. I am an aspiring multifamily investor.
My why is clear, I am a single mom who wants to provide financial security and quality time to my son. Also, I have lived in 3 different countries and I have invested in 2 single family homes, successfully, in two of them.
So obviously there is no "one single right way", but what would YOU do?
Thanks for the time!
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4yThanks for sharing Larry. Great insight. I am looking to acquire my first property in Florida and my primary focus is on multifamily rentals.
Quote from @Larry Turowski:
@Andrea Diaz, yeah, I kind of agree with both @Scott E. and @Steven Foster Wilson. You're question is so general. Someone who is ready to move forward knows what they are looking for for their first deal. That means educating yourself to the point where you can define the what, how much, where questions and then come back here with a more pointed question. My goal for my first few deals was to invest here where I live, I wasn't comfortable with long distance, and to be able to sell without taking a big or any hit if it turned out I didn't hit. That meant either a flips or BRRRs. That in turn meant that I needed to figure out how to find good deals on the MLS (that was possible back then) or through wholesalers or on my own. The meant I needed to look at a lot of deals on the MLS, network with investors and wholesalers and figure out how to market. And those things in turn meant other things.
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @Steven Foster Wilson:
Interesting take. Although as a newbie I think I´d feel more confortable keeping local for now, I am shopping right now so I will mark Columbus on my list as one of the best places to invest.
- Real Estate Agent · Germantown · Member since 2020 · 8 posts · 10 votes4y
@Andrea Diaz - Congrats on starting your RE journey! Just like you, after spending a little over 2 years on the sidelines reading books, articles and listening to podcasts about RE, I have decided that 2022 is the year I'm jumping in! I would agree with the others that educating yourself is key, when starting out.
Some people are able to take action from reading and researching but I felt overwhelmed with all the information out there and it kept me in analysis paralysis mode FOR EVER!! That's when I decided to go for a 12 week coaching program to help me get started, because a lot of what was holding me back were really mindsets related. Starting this program gave me the structure I needed to develop a clear strayegy. In addition to the networking, group members are accountability partners that help me stay focused.
If interested you can check out the program : https://www.openspaceswomen.com/ I am not being paid for them whatsoever but just wanted to share is working for me. This program focuses on the BRRRR strategy, if you are into this. I'm sure there are other great programs out there. The point is, sometimes investing in a coaching program might be a good way to get traction.
Best of luck in your journey!
- Member since 2020 · 19 posts · 13 votes4y
@Andrea Diaz
I would look for a multi family unit you can use 60k as a down payment and use the rest to make the property worth more so you can charge more rent.
Once you do that refi get original down payment back and do it again. Make sure you research the property before you do that because the numbers have to add up to be able to that.
Also sellers market or buyers market don't really matter just make sure the numbers work for you and your end game.
- Investor · Portland, OR · Member since 2016 · 213 posts · 60 votes4y
@Andrea Diaz could you find 9 people that could put in 100k each?
Is there something in your business you can buy office building ... leverage sba or user occupied at 50% and rent other part of the office or retal?
- Renter · Las Vegas, NV · Member since 2018 · 278 posts · 71 votes4y
wait...patience :)
you will only find a few
opportunities in your life
by Charlie Munger
- Investor · Batavia, IL · Member since 2014 · 102 posts · 81 votes4y
Investing as a Passive investor first will enable you to learn about the investment assets, the operators and their strategy to meet the objectives of the project. It will also enable you to earn some revenue while you learn.
After that, your decisions may become more clear. I would also find a mentor or a mastermind group once you are ready to shorten your learning curve and provide access to their network.
Good Luck,
Joe
- Realtor · Bradenton, FL (Bradenton) · Member since 2020 · 88 posts · 44 votes4y
Hello @Andrea Diaz,
Multi-family properties are a great investment for cash flow, but you just have to make sure you run your numbers properly and buy right on your first deal. The FL market is inflated right now, so I would recommend looking for a multi-family deal with a value add component to mitigate some of risk. That way if the market does correct (I am of the opinion that the FL market is in too high demand to crash, but there will be a correction soon), you have some room to weather the storm with either cosmetic improvements or rental increases.
I am active in the Central FL market, feel free to reach out if you need help with analyzing any properties in the area and I can give you my insight. - Investor · Indianapolis Indiana · Member since 2022 · 15 posts · 32 votes4yAndrea, thank you for the reply.
Quote from @Andrea Diaz:
Quote from @Blake Pieroni:
@Andrea Diaz Congrats on your journey so far, 100k is a lot of money!
I think first off, IMO you need to decide two things for yourself.
1.) Why do you want to invest in real estate?
2.) Do you want to be an active investor or passive investor?
Active: Finding the deals, underwriting them, putting everything together, executing the biz plan and managing the asset(s) afterwards. Passive: investing with another group and relying on them to all of this and be good stewards of your money.
I'd love to hear your specific goal for this 100k to better give my opinion. Nevertheless, I wish you the best in this new adventure!
Hey Blake!
I´d probably want to start as a passive investor, work a buy-and-hold portfolio strategy for long-term investments. I am an aspiring multifamily investor.
My why is clear, I am a single mom who wants to provide financial security and quality time to my son. Also, I have lived in 3 different countries and I have invested in 2 single family homes, successfully, in two of them.
So obviously there is no "one single right way", but what would YOU do?
Thanks for the time!
Since you want to be a passive investor (as do I)
If it were me with the 100k, I would get a list of 4-7 sponsors and meet with them, in hopes of vetting them thoroughly.
Since I am young and want my money to grow a lot, I would place the 100k in the best growth position with my preferred sponsor. Likely doubling the 100k in 4-5 years and 4x over 10. Then I would repeat with the now 400k for another 10. Now its 1.6M with no additional capital investment.
I'm 26, so again this is what I would do, but thank you for asking! - Investor · Philadelphia, PA · Member since 2020 · 82 posts · 36 votes4y
Hi @Andrea Diaz,
Great to hear about your success so far!
If you do want it to be more passive, I would not get into wholesaling or flipping. Even being a landlord is not really passive.
I'm a full time real estate note investor where I'm able to receive monthly cashflow without the headaches of property management or repairs. Even with that, it takes active work to find the deals, do the due diligence and keep an eye on them.
If I were you,I would either participate in a syndication of some kind or privately lend that money out on RE deals. That way your money is still working for you in real estate but you don't take on lots of active work.
- 4yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Find the right market
You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities, City of Detroit Neighborhoods and comparing Metro Detroit to other hotspots investors usually consider:
Logical Property Management4.9459 Reviews - 4yJim PfeiferBusiness MemberInvestor · Dublin, OH · Member since 2014 · 241 posts · 495 votesYou mentioned that you want to be passive and buy multifamily properties. In my experience as an active investor owning single and multi family and as a passive investor in syndications, I can tell you that buying the properties is not at all passive! You can hire a property manager, but your job will be managing that person. You will be an asset manager - I tried to do that "passively" and it was not possible. Perhaps others have different experiences, but buying properties and being an asset manager is a full time job - at least if you want to do it well.
Quote from @Andrea Diaz:
Quote from @Blake Pieroni:
@Andrea Diaz Congrats on your journey so far, 100k is a lot of money!
I think first off, IMO you need to decide two things for yourself.
1.) Why do you want to invest in real estate?
2.) Do you want to be an active investor or passive investor?
Active: Finding the deals, underwriting them, putting everything together, executing the biz plan and managing the asset(s) afterwards. Passive: investing with another group and relying on them to all of this and be good stewards of your money.
I'd love to hear your specific goal for this 100k to better give my opinion. Nevertheless, I wish you the best in this new adventure!
Hey Blake!
I´d probably want to start as a passive investor, work a buy-and-hold portfolio strategy for long-term investments. I am an aspiring multifamily investor.
My why is clear, I am a single mom who wants to provide financial security and quality time to my son. Also, I have lived in 3 different countries and I have invested in 2 single family homes, successfully, in two of them.
So obviously there is no "one single right way", but what would YOU do?
Thanks for the time!
If you are interested in being a true passive investor, then I would look into real estate syndications as some have mentioned. You have some work to do to find and qualify sponsors, then find and analyze deals - but once you send the wire you are done with the active part. After that, you just collect reports and distributions. That is truly passive investing.
I think the first thing to do is define passive and active from your perspective and then choose which you want to do. At that point, you can start working to deploy the capital.
Good luck!
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @Nadgèle Zéphir:
@Andrea Diaz - Congrats on starting your RE journey! Just like you, after spending a little over 2 years on the sidelines reading books, articles and listening to podcasts about RE, I have decided that 2022 is the year I'm jumping in! I would agree with the others that educating yourself is key, when starting out.
Some people are able to take action from reading and researching but I felt overwhelmed with all the information out there and it kept me in analysis paralysis mode FOR EVER!! That's when I decided to go for a 12 week coaching program to help me get started, because a lot of what was holding me back were really mindsets related. Starting this program gave me the structure I needed to develop a clear strayegy. In addition to the networking, group members are accountability partners that help me stay focused.
If interested you can check out the program : https://www.openspaceswomen.com/ I am not being paid for them whatsoever but just wanted to share is working for me. This program focuses on the BRRRR strategy, if you are into this. I'm sure there are other great programs out there. The point is, sometimes investing in a coaching program might be a good way to get traction.
Best of luck in your journey!
Hi Nad! I believe in systems and I consider myself pretty good at building them and following through, but I would definitely love to find a great mentor in REI that can share knowledge and insights, as well as offer guidance.
I appreciate the tip, will look more into to it, thank you! - New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from :
@Andrea Diaz
I would look for a multi family unit you can use 60k as a down payment and use the rest to make the property worth more so you can charge more rent.
Once you do that refi get original down payment back and do it again. Make sure you research the property before you do that because the numbers have to add up to be able to that.
Also sellers market or buyers market don't really matter just make sure the numbers work for you and your end game.
Like the approach. Thanks for sharing your strategy and POV @Tyler Triplett
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @John Acheson:
wait...patience :)
you will only find a few
opportunities in your life
by Charlie Munger
"Business opportunities are like buses, there’s always another one coming" – Richard Branson
Thanks John. - New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @Zachary Bliss:
Hello @Andrea Diaz,
Multi-family properties are a great investment for cash flow, but you just have to make sure you run your numbers properly and buy right on your first deal. The FL market is inflated right now, so I would recommend looking for a multi-family deal with a value add component to mitigate some of risk. That way if the market does correct (I am of the opinion that the FL market is in too high demand to crash, but there will be a correction soon), you have some room to weather the storm with either cosmetic improvements or rental increases.
I am active in the Central FL market, feel free to reach out if you need help with analyzing any properties in the area and I can give you my insight.Thanks for the note. Agreed, value-add investing is an excellent strategy for investors. Of course, a hybrid yield + value-add investment is ideal, won't you agree? Where an asset gets improved, cash on cash yields are high, and the market increases simultaneously.
I will be definitely reaching out to you to discuss further on the CFL market.
- New to Real Estate · Orlando, FL · Member since 2022 · 26 posts · 12 votes4y
Quote from @Blake Pieroni:
Andrea, thank you for the reply.Quote from @Andrea Diaz:
Quote from @Blake Pieroni:
@Andrea Diaz Congrats on your journey so far, 100k is a lot of money!
I think first off, IMO you need to decide two things for yourself.
1.) Why do you want to invest in real estate?
2.) Do you want to be an active investor or passive investor?
Active: Finding the deals, underwriting them, putting everything together, executing the biz plan and managing the asset(s) afterwards. Passive: investing with another group and relying on them to all of this and be good stewards of your money.
I'd love to hear your specific goal for this 100k to better give my opinion. Nevertheless, I wish you the best in this new adventure!
Hey Blake!
I´d probably want to start as a passive investor, work a buy-and-hold portfolio strategy for long-term investments. I am an aspiring multifamily investor.
My why is clear, I am a single mom who wants to provide financial security and quality time to my son. Also, I have lived in 3 different countries and I have invested in 2 single family homes, successfully, in two of them.
So obviously there is no "one single right way", but what would YOU do?
Thanks for the time!
Since you want to be a passive investor (as do I)
If it were me with the 100k, I would get a list of 4-7 sponsors and meet with them, in hopes of vetting them thoroughly.
Since I am young and want my money to grow a lot, I would place the 100k in the best growth position with my preferred sponsor. Likely doubling the 100k in 4-5 years and 4x over 10. Then I would repeat with the now 400k for another 10. Now its 1.6M with no additional capital investment.
I'm 26, so again this is what I would do, but thank you for asking!It is an appealing strategy I hadn't consider and since I'm also young, I will keep it in the mix. Thanks @Blake Pieroni
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