Which would you do If you had 200K?

Question

Hello BP!

I am asking this question so I can evaluate the responses and see if one strategy is more favorable than another.

If you had 200K to invest in real estate, would you rather buy one property (an upper/middle class 3bd/2ba) and pay it off completely to maximize cash flow and be debt free? Or, put down payments on five properties? (assuming 200k would cover 20% down and all other fees for 5 properties in your area) Lets say the five properties were filled with tenants before the first mortgage payments were due. If the answer is obvious or I don't have enough information, I apologize, I am a newbie! Feel free to change up the scenario.

Justin B. · Answer

Since you're asking what *I* would do, I'd buy the 5 properties with 20% down each.  The math is simple, returns will be higher and you'll have 5 properties appreciating instead of 1.  BUT it depends on your goals.  Unless your goal is to buy enough property to pay your expenses and then stop, the 5 properties are the way to go.

Vivek Khoche · Answer

@Christian Clauson - If I am a newbie from west coast and really have $200K, I won't be posting that on social media. There are enough postings on both sides on BP, I would dig through them.

Good Luck Investing

Vivek

Joe Villeneuve · Answer

Now.  After you have put your team together, and you have a plan (and buying 3 flips and 1 hold a year isn't a plan...or a goal set), I would take the the knowledge of how money works, and the Golden Rule #1, and buy all cash...get your cash back out "with friends (profit)", and repeat this until you've grown your "seed money" from $200k to $???? (this is up to what your "plan" dictates).

Then, I would continue to flip your "Seed money", and use only your "friends" to buy cash flow rentals...in the midwest.

Follow these steps, and you will never spend a dime of your own money...only use it to infinity.

Jeff Wallenius · Answer

I'd start two BRRRR projects in the Midwest, get to 10 rentals in my portfolio with that strategy and then move to multifamily or mobile home park investing. I also agree with @Joe Villeneuve that you need to dream bigger, build the team as he said and never look back!

Tom Ott · Answer

I would do 20% down on multiple properties in the Midwest where the homes are only $100k that do not need a lot of work.

Joe Villeneuve · Answer

Here's what I would do:

* Find Cash Partners* Find Credit Partners* Put together a Power Team* Write Down and organize your financial goals based on your financial needs (cash flow, personal debt)* Learn how to analyze markets to find the micro-markets that match your financial goals* Learn how money works (you will not learn this from most REI, or Harvard Business School)* Become highly proficient in both Geometry and Algebra (Analytical)* Understand the 2 Golden Rules of REI.* Understand the difference between:     * Good and Bad Debt     * Cost and Expense     * Cash Flow and Profit     * Good and Bad Equity

...at least that's where I would start...if I had to do it all over again.

Which falls under the category of, "If I only knew then what I know now..."

Which would you do If you had 200K?

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