We have cash, Now what!?

Question

Hi Everyone!

The company my wife works for vested some stocks that she received and we have a chunk of change now that we want to invest.

My question is how would you all take advantage of this opportunity and what would be your strategy to invest as much of the money without losing it to things like taxes.

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Dawn Anastasi · Answer

I think a lot of people could say that.  :)

Elizabeth Colegrove · Answer

everyone will have a very different opinion! We live I'm central California and live investing here! While we don't have nearly your spare change, we have been taking our 60k+ annually and investing it locally and out of state! I have started trying to invest it locally as much as possible. I love the fact that this area has low taxes and instance is appreciating and I can spend $150-230k and get class a properties.

We are investing for the long term so the cash flow isn't need now but for when we want to find early retirement in 14 years!

So it really comes down to you goals, business plans and where you see yourself.

We are investing for the long term so the cash flow isn't need now but for when we want to find early retirement in 14 years!

So it really comes down to you goals, business plans and where you see yourself.

Jerry Padilla · Answer

@Konrad Lightner you can purchase up to ten properties in your name and up to ten in your wife's name as well. That is a good chunk for down payments for buy and hold properties.

Dan B. · Answer

As @Paul  Garcia mentioned, reserve requirements can add up fast and your debt to income will likely be out of whack pretty quickly unless you have extremely high income. Most lenders will not count the rental income until you have 2 years experience as a landlord/investor. So, looking at a bit larger complex might be a good idea.

As for deals in Minneapolis, there are very few on the MLS these days. I'm closing on a duplex on Friday and have another short sale in the works, but there are not near the number of deals available like there were 18-24mos ago.

Paul Garcia · Answer

I would suggest buying a 5+ unit property and financing with a commercial loan. In my short experience, trying to quickly build a portfolio with conventional loans can be difficult, even when you have cash. If you try hard enough you can find a lender who will work with you to get past debt-to-income issues and the number of properties financed. But reserve requirements add up quickly and can ultimately shrink the amount of cash you have to invest.

Joe Mueller · Answer

Leverage it up if you can.

$264 can equate to a bunch of downpayments on properties depending on the area you choose, which it sounds like MN is the state you're choosing to invest in.

I know there's a few turn key guys out there to try as an option!

Joe

Mark Shaffar · Answer

@Konrad Lightner you might also want to be open about where you invest. Cash flow can be better in other cities with fewer investors. I'm sure MN has better cash flow than CA, but you may want to think about other Midwestern cities.

Jerry Padilla · Answer

Not sure about the taxes. It is my understanding that it is a like kind wxchange esl estate for real estate, not stocks for real estate. Plus the money can't ever go in your hands and it sounds like it already is, making it too late. I could be wrong? ..... As far as the mortgage..... If one can qualify..... You can get more mortgages if you each just put them in your individual names - 10 each, instead of together. Guidelines become more strict after 4 properties.... So you can wait a little longer and have less of a down payment with 4 or less mortgages in each name.

Sawyer Lubke · Answer

@Konrad Lightner

If you plan on purchasing more than 10 properties, it would probably be a good idea to put only one name on the loan so you can acquire 20 properties and not only 10. Of coarse you can acquire unlimited properties with other types of financing, but you might as well get 20 loans with great terms!

Best,

Sawyer

Elizabeth Colegrove · Answer

if your not aggressive you won't be succesful! Our is 100k in 14 years although we are on track to reach those goals much quicker.

We have cash, Now what!?

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