Real Estate Agent · Tampa FL · Member since 2016 · 53 posts · 27 votes
I'd imagine there's a board with this, or a similar amount already but I couldn't find it... My question is, if you had 80-100K to invest where would you prefer to start? Numerous SFH, just 1 SFH, multi-family, apartment property (over 4 units), notes, etc.
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
Agree w/Nick, if you are accredited, with that money, you could easily get into syndications at that level and participate in large apartments where you get scale and forced appreciation. The latter is very important now that we are in the longer end of the cycle. Trying to find this on your own in a competitive market w/out a ton of experience, resources and contacts is a disadvantage and increases your risk. Secondly. I advocate by investing w/the experts who are in the right markets and leveraging the right model (B/C value add) you can do very well. Good syndicates should also keep you well informed and answer any question you have hence you can get a good education as well. I call this the earn and learn concept. Most syndications have a min of $50K so you could parlay that into a couple different syndications and geographically diversify yourself.
Large apartments have had a good run but everything we learn and read about is that the trend of renter demand should continue w/millennials and boomers. Given higher SF home prices, we will continue to see strong demand and little supply of B/C renovated apts (once value add is in place) that will continue to offer a very affordable and updated living for those seeking value living. Differences in rental rates from Class A (new construction that you see going up around you) and Class B after renovations is easily $1K / month. If economy softens, class B holds up like a rock while class A will face headwinds of over supply at some point and reduced rates to keep folks in their buildings. We saw this in Houston during the oil downturn w/our partner (B/C class) who's occupancy held up while class A fell off the cliff. Need another reason, during 2008, residential mortgage delinquency hit 5% nationwide while MF was 1%. Hands down, you should take a serious look at syndication, MF large apts in growth markets (pop/jobs growing > natl averages, diversified job base), projects that are value add only w/sponsors who practice conservative underwriting and have a solid track record of delivering investor value.
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
9y
I would invest in multi-family apartment buildings, but I wouldn't use the whole 80K for down payment, you need reserves. 4+ units would be an option if your local market isn't too expensive.
Investor · Austin, TX · Member since 2013 · 933 posts · 1k+ votes
9y
Agree w/Nick, if you are accredited, with that money, you could easily get into syndications at that level and participate in large apartments where you get scale and forced appreciation. The latter is very important now that we are in the longer end of the cycle. Trying to find this on your own in a competitive market w/out a ton of experience, resources and contacts is a disadvantage and increases your risk. Secondly. I advocate by investing w/the experts who are in the right markets and leveraging the right model (B/C value add) you can do very well. Good syndicates should also keep you well informed and answer any question you have hence you can get a good education as well. I call this the earn and learn concept. Most syndications have a min of $50K so you could parlay that into a couple different syndications and geographically diversify yourself.
Large apartments have had a good run but everything we learn and read about is that the trend of renter demand should continue w/millennials and boomers. Given higher SF home prices, we will continue to see strong demand and little supply of B/C renovated apts (once value add is in place) that will continue to offer a very affordable and updated living for those seeking value living. Differences in rental rates from Class A (new construction that you see going up around you) and Class B after renovations is easily $1K / month. If economy softens, class B holds up like a rock while class A will face headwinds of over supply at some point and reduced rates to keep folks in their buildings. We saw this in Houston during the oil downturn w/our partner (B/C class) who's occupancy held up while class A fell off the cliff. Need another reason, during 2008, residential mortgage delinquency hit 5% nationwide while MF was 1%. Hands down, you should take a serious look at syndication, MF large apts in growth markets (pop/jobs growing > natl averages, diversified job base), projects that are value add only w/sponsors who practice conservative underwriting and have a solid track record of delivering investor value.
Specialist · Indianapolis, IN · Member since 2014 · 670 posts · 352 votes
9y
@Chris Schoonhoven depends on your investing goals and timelines. If your more aggressive I would look to either fix and flip with a proven operator or buy a value add multifamily to increase your liquid cash position. We've been having success in the Oklahoma City market with this strategy. If your looking for a passive return, a syndicated fund. Passive return with appreciation you can look locally to buying rentals and building your portfolio, with this you get the benefit of home ownership and all that comes with that.
Investor · Oklahoma City, OK · Member since 2015 · 16 posts · 10 votes
9y
It will depend on your need and need of cash flow/investment return. We do fix & flips and recently started in Oklahoma city, we seek projects with return not lower than 20%, in a short period of time ( no more than 6 months from beginning to end ), so we can use the same investing capital twice a year, having a total ROI of 40% a year, or at least something near to that.
We started in may 2016 with our first single family home and already sold our second, with a ROI of over 25% in each project. Our next goal is to have 2 fix & flips at the same time, so you make the numbers. It will all depend on your needs and if you want passive income or agressive and fast, but with maybe a little more risk income. Hope this helps you make a wise decision!
Investor · Oklahoma City, OK · Member since 2015 · 16 posts · 10 votes
9y
Jeff Wallenius Yes we do. You can look us up. DECODE LLC. We have a facebook page, if you are interested in our services, we'll be more than glad to serve you! I see you've done fix & flips as well... do you have a company on the OKC?
Rental Property Investor · Arlington, TX · Member since 2012 · 788 posts · 640 votes
9y
I personally would stay away of any investment that involves pooled funds. Just to many hands in the cookie jar. I would team up with an experienced rehabber in your area and offer to JV partner with him on a project (make sure he/she is properly vetted)or buy 1 rental with 20% down. Best of Luck!
Real Estate Agent · Tampa FL · Member since 2016 · 53 posts · 27 votes
9y
Very interesting. I'm considering continuing with small SFH in area's that I like. I figure I can probably get about 4 units with that amount of cash and I'm setting my goal at cash flow for a total of $800/month. I'd love to get into the apartment space but don't have the experience and I want to continue on building my personal portfolio and passive income. SFH is my only area of experience this time so I'd rather play it smart than get burnt trying to get into something that I am not comfortable with.
Investor · Dallas, TX · Member since 2016 · 168 posts · 195 votes
9y
Hi Chris! I did not see above if you were looking for strictly a passive investment or an active investment opportunity. I am a Multifamily (Apartment) Investor and Syndicator. We started off buying 1-4 units at a time 22 yrs ago. Now we only buy large complexes thru syndication, with 1700 units by the end of this month! We are passive investors as well as active syndicators. Because this is the investment type I prefer, this is what I will talk about. If you just want passive income...then joining a Multifamily syndication is great. You would be able to find syndicators on bigger pockets for sure or local REAI clubs, that you can talk to and get to know and see who has deals for you to consider. You can ask for references and you should have a list of questions to vet out a potential bad Syndicator - yes they are out there!!
Being an active investor is more of the syndication side...where we actively find the deals thru relations with Brokers, run the numbers in detail on the potential properties, tour the properties and if we move forward on it...then start raising money from other investors to buy the property thru syndication.
We hold training events and webinars to teach people each of these 2 aspects of Apartment Investing but focus on the passive investor education.
I strongly suggest you learn about the type of investment you are considering in. Learn to evaluate the deals (to some level) to make sure the deal being presented to you is actually going to perform like promised. We see lots of numbers being changed to "make a deal work" because the hot markets are getting tighter, and people are overpaying for the properties!
Do you have an expectation of the kind of return you are hoping to get each year?
Do you know what your risk tolerance is for investing?
All these things you should consider learning or researching before you invest.
And...if you only have $80-100k to invest, Please consider putting the money in 2 different deals.
I hope this helps. We have friends who are doing a development in Belize if being an International Investor appeals to you. We also have an investor who is doing Storage Units. I could refer you to those people if that is of interest. Again...whatever you chose, please educate yourself about the investment first.
Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
9y
Hi @Chris Schoonhoven, agree with many of the posts so far. I'll also add that if someone is looking to take a more passive role in real estate and wants the benefits of diversification there are funds available to accredited investors that are designed to allow investors the opportunity for ownership of institutional investment grade property that is occupied by regional, national, and Fortune 500 credited companies.
Real Estate Investor · North Ridgeville, OH · Member since 2016 · 97 posts · 81 votes
9y
Don't look for a type of property look for value. In the last twelve months I have spent $100k of my own money on rentals. I purchased one SFR, one condo, and one duplex. I bought the properties simply because of the value. Value meaning NOI and return on investment. If a property doesn't return at least 15% a year I won't even consider it. Typically I try to really shoot for 25% plus, but if it's the right property meaning in a high demand area and in great shape I will purchase if the return is 15% or higher.
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
9y
If your net worth is greater than a 1M and you are saving over 40k a year then go passives in syndications or large MFH. If not get experience and do SFHs. Obviously that a short broad answer to a crazy question. But if you have any affirmation questions as to the why please reach out.
I'd imagine there's a board with this, or a similar amount already but I couldn't find it... My question is, if you had 80-100K to invest where would you prefer to start? Numerous SFH, just 1 SFH, multi-family, apartment property (over 4 units), notes, etc.
Thanks!
Invest 10%, give 10% to charity, and spend the remaining 80% on food, drink, travel, hobbies, and unforgettable experiences. Money is easy made and easily lost, remember this! The mindsets, memories, and skills cannot be taken away from you..
Engineer · Monmouth Beach, NJ · Member since 2016 · 132 posts · 25 votes
9y
@Chris Schoonhoven Are you looking at areas in the Jersey Shore area? I am in a similar boat as you financially and based out of Monmouth Beach/Long Branch.
I'd imagine there's a board with this, or a similar amount already but I couldn't find it... My question is, if you had 80-100K to invest where would you prefer to start? Numerous SFH, just 1 SFH, multi-family, apartment property (over 4 units), notes, etc.
Thanks!
Invest 10%, give 10% to charity, and spend the remaining 80% on food, drink, travel, hobbies, and unforgettable experiences. Money is easy made and easily lost, remember this! The mindsets, memories, and skills cannot be taken away from you..
Andrey, I believe Chris is asking about how to "invest 10%" (which just happens to be $80-100k!)
ie. It's not for us to determine that he's not already doing all those other things with other money.
I recommend: using it as a 25% deposit for the best-value real estate you can find, that still cash flows at 75% leverage, and would appraise later at 140%+ what you paid, so you can refi to get it all back again anyway! Then, ask the question again! Please keep us posted Chris. All the best...
Banker · Philadelphia · Member since 2009 · 2k+ posts · 634 votes
9y
Hi @Chris Schoonhoven,
Welcome to BP!
Leverage the monies depending on your financial capability in obtaining debt (Mortgages). Look at it as Art of War - Hit Privates (SFR) or some Captains or Colonels (3-4 Units) depending on what markets you are looking at $80K divided including closing costs and reserves might not be New Jersey, But Markets like Philadelphia, Delaware, NYS.
I'd imagine there's a board with this, or a similar amount already but I couldn't find it... My question is, if you had 80-100K to invest where would you prefer to start? Numerous SFH, just 1 SFH, multi-family, apartment property (over 4 units), notes, etc.
Thanks!
Chris,
I'll likely disagree with most people's responses here, with the exception of one that mentioned investment goals.
The answer to the question you're asking has to do with first and foremost (1) your personal short and long term investment goals and the lifestyle you'd like to build for yourself and (2) what qualities, skills, and experience you bring to the table. (2) is so because you're usually better off doing what you're already good at. I'm slow to invest in a new asset class that I have no experience in. You should be too. If you really want to learn to invest in a new asset class, start slowly, do the research and educate yourself, surround yourself with experts etc...
In regard to (1), ALL your activities as an investor should further your personal investment goals. If you don't have very specific goals written out, I'd do that FIRST. If you're doing things that do not further your goals YOU ARE WASTING YOUR TIME. You're operating like a ship without a rudder, guaranteed to go in circles and get nowhere.
Don't listen to other investors goals, think deeply about your own and what you will achieve. Then develop a strategy to achieve it. People can help along the way, but never take their goals and strategy as your own. Real estate investing is a solo sport. Be skeptical of ALL INFORMATION. Verify it for yourself. If you find that it is true use it.
So, back to your question...personally I would say that if your goal is to have the most control of your investment and you're not accredited, you can't and shouldn't invest in syndications. If you have experience investing in SFR, I would stay with that. But overtime get more efficient with your SFR investment by coming up with a better property management model, eliminating expenses, decreasing vacancy, and increasing income. Perfect your system!
Investing in properties 4-59 units in size is problematic from a property management perspective...so I would avoid investing in these properties. Once you get the requisite track record, capital (30% down payment + 5% closing costs) and can raise investor capital, I'd shoot for an acquisition of a 60+ unit multifamily.
Syndication in a multi family deal. Find the right deal and the right PM. Learn your markets. Take time to purchase the "right deal". If it takes one year to find a deal that will pay you yearly... you are in good shape!
I personally would stay away of any investment that involves pooled funds. Just to many hands in the cookie jar. I would team up with an experienced rehabber in your area and offer to JV partner with him on a project (make sure he/she is properly vetted)or buy 1 rental with 20% down. Best of Luck!
I second this. It's how I got started in the US. And funny enough, I posted a JV post in the marketplace just 15 minutes ago.
Rental Property Investor · Oklahoma City, OK · Member since 2015 · 89 posts · 36 votes
9y
Man to be honest, you have to start with the end in mind. If you are looking to get out of your 9 to 5 then I would go straight to multifamily. That is what I did 10 yeas ago, and now I'm writing to you from my motorcycle travels here in South America! In monopoly you win with 4 red houses, and a green hotel, but in my experience you need only a single blue apartment building for finacial freedom. With Multi you take advantages of economies of scale as well as having your risk divided over several doors rather than just one :D
Real Estate Agent · Tampa FL · Member since 2016 · 53 posts · 27 votes
9y
@Nathan Allen I'd love to but I don't have experience in multi's and don't know where to start. Suggestions?
@Lucas P. I'd do that but I live in NJ and I'm not bullish on the market here. Prices are too high as well. So I've been looking to partner in areas like OH, TN, and IN