How would YOU invest $100k (if YOU were ME, that is)

How would YOU invest $100k (if YOU were ME, that is)

San Diego, CA · Member since 2012 · 19 posts · 3 votes

Hello everybody, was curious to get some general insight / varying opinions from seasoned investors about real estate investing strategies as they relate to my particular situation. (Also not opposed to very specific advice either).

Ok, for starters, let’s assume I have $100k cash to invest in real estate (ideally multi-unit properties). Let’s also assume I have adequate cash reserves beyond this as well as a good income (vague, I know, but let’s just assume I don’t walk around with a sign stating “OCCUPY! I AM THE 99%).

Also, I am not looking to spend a lot of time managing this beyond the initial research, due-diligence required, etc for initial investment(s) and further acquisitions down the road as the climate dictates (ie, real estate investing won’t be my full-time job). Furthermore, I am not necessarily looking for cash flow in the short-term (apart from, of course, having adequate cash flow to cover debt service/ property management/ repairs/ vacancy, etc, etc). Looking more towards long-term capital growth followed by high cash flow down the road (10-20 yrs or so…).

Let’s also assume property location doesn’t matter in so far as the plan is for them to be professionally managed (ie, Texas vs Vegas vs Beverly Hills doesn’t matter so much but prefer not to invest in ‘war zones’)….

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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
14y

Well, if you don't have much experience, and you're looking for an investment where your biggest time investment is in "the initial research, due-diligence required, etc," then I would suggest finding an experienced and successful investor who needs capital, and partner with him/her.

Unfortunately, it's going to be tough to have such a limited role in the investment (especially with limited knowledge/experience) and still be successful on your own. Be the cash guy and find someone who can bring the rest of the pieces of the puzzle.

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  • Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    14y

    Look for a small mobile home park to buy.

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
    14y

    Well, if you don't have much experience, and you're looking for an investment where your biggest time investment is in "the initial research, due-diligence required, etc," then I would suggest finding an experienced and successful investor who needs capital, and partner with him/her.

    Unfortunately, it's going to be tough to have such a limited role in the investment (especially with limited knowledge/experience) and still be successful on your own. Be the cash guy and find someone who can bring the rest of the pieces of the puzzle.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    14y
    Originally posted by Dale Osborn:
    Look for a small mobile home park to buy.

    This really could be an interesting play if you find one in an area that is coming up and the MHP is out of place, but is grandfathered. Perhaps it was in an outlying suburb, but now the city has grown and is all around it. Let it cash flow until a developer takes you out for a valuation beyond MHP norms.

  • Real Estate Investor · Atlanta, GA · Member since 2009 · 339 posts · 126 votes
    14y

    Other than that getting yourself a rental house or two should not prove to be too much work. If you will be buying in San Diego then that would be just one house probably.

    If you find something that just needs paint and carpet and the rent that it brings in gives you a 20% return on your cash or better then you should be in good shape. Make sure that you factor a property manager in your return calculations so that it requires the least involvement on your part.

  • Real Estate Investor · Chattanooga, TN · Member since 2009 · 191 posts · 47 votes
    14y

    Hi Scott,
    You capitalized the YOU so I'll tell you what I would do but only you know the big picture of your finances.

    If you are not planning to use the initial cash flow, I'd buy properties with at least 20K+ of equity in them and leverage your money with loans. Slightly nicer houses will allow you to get more depreciation and help with taxes. Make sure you talk to you accountant about owning rental property.

    Find a area with excellent future job potential, cheaper housing and rising rents. Look for a state with good taxes and landlord laws. Good luck. mck

  • Investor · Fort Worth, TX · Member since 2011 · 1k+ posts · 450 votes
    14y

    You could just invest in REITs.

    Even if you get a PM, You'll still have to contend with the propety(ies) in some form.

    Read about people's experience with PM's by and large. You will find that although some use PM's, the vast majority are in opposition. Also, there are few investors who think out of state is a good idea. Most that do out of state,thouugh, live in California, as I see you do.

    With 100K and high income, I'd look real hard at being willing to be more involved for a few years and possibly buying a small apartment building. Not sure how lending could occur with such an investment if you have no experience, though. I'm sure you could find if if you looked hard enough.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    I would say triple net but 100k is too light to purchase.You could save up more however.

    You really need about 200k to 300k to get going in triple net.

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