100k cash. New Investor. Looking for the right deal structure.

4 Replies

I am in a similar situation. I've been in what I would almost call analysis paralysis on deciding which model to pursue.  

I want to jump into a bigger deal, a deal potentially involving syndication. Is that the right direction? is 100k enough to bring to the table for a new investor into a deal? Would it make sense for someone like me to start as a passive investor in a big deal? I would like to be passive but be involved in the deal to learn the ropes; I think that would be fair to assume this wouldnt be a problem. 

I've also considered buying a couple small (2-4) properties. But that doesn't excite me. I want to be involved with big deals.

I feel like "just jump in, network and do a deal" is my mindset but I want some different perspectives from someone who's been there. 

What would you do differently starting out, knowing what you know now?

Where would you look to find investors looking for someone to partner with? 

How do you gauge an investors credibility?

Trey

@Trey Read - Grant Cardone will dissagree with me, but most people are better off learning the ropes on a smaller scale: 1 to 4 units. The process is the same, but the numbers are more manageable and you can afford to fail - and fail faster, because that's how you learn the most. These fail's are not the whipe-you-out kind of fails, but 100 little ones you make and learn and adjust.

You will have to earn your status in this industry. Nobody will give you a large amount of cash knowing that you have never done this. Your experience and your integrity are your two most valuable assets. You are only as good as your reputation!

You will learn very quickly when you go to summits, meet-ups etc - if you meet a new person, they will ask your typically within 5 minutes how many units you own and what they are. For many people it is the most obvious way to gauge if someone is worth talking to or if you should better network with someone else - to be blunt.

What I would do differently? Spend more time finding a great agent (mine had no clue about investing, however, she was a very, very nice older lady) and scale faster. I felt insecure and wanted to see it work for a while first, because I had nobody who would mentor me and confirm that I am on the right path.

@Trey Read

I literally just responded to pretty much the same question on this thread: 

https://www.biggerpockets.com/forums/519/topics/750811-what-would-you-do-with-200k?page=2

I'll post my response for you here just in case:

1) I'd refrain advertising how much funds I have on social media. In fact, I'd recommend taking such post down all together.

2) Since there're many posts like this one, I'd (a) search through BP and (b) Google it.

3) If your preference is to invest in RE, then decide how active you can/want to be in RE investing. Here's a guide to help you:
https://www.biggerpockets.com/member-blogs/10850/84064-what-type-of-investor-to-be-when-i-grow-up-active-or-passiv

4) Once you answer #3, research the various niches within it and decide what suits you best. Learn it inside out.

5) Only after you complete #4, take action.

For more ideas, feel free to PM me.

My best!

@Trey Read

I have to agree with @Alina Trigub while adding in my own 2 cents.  Cash is and always will be king, remember that.  With that being said it's important that you treat this business with respect in terms of "dipping in".  What I mean by that is there are a vast array of different ways to invest.  Once you choose the type you like, you need to network and find someone who is successful at that type of investing.  Learn the ropes from that person or team directly and DO NOT put all your eggs in one basket upon purchasing your first deal.  There is so much to learn that the last thing you want to do is be left with no opportunity to grow.  I hope this helped and best of luck!

Passively investing on the LP side will still be a benefit for you in the long run. You might not be in on the GP side till you form some sort of relationship and history with the operating team. Investing passively will get you familiar with them and accustomed to what they are doing. 

With that said, if you start fresh you will most likely be in on the GP side with newer investors, learning as you go type of situation. 

There is that exception that you might find a team that accepts you on a small and I mean very small part but for your $100k trade off, might not be worth it. 

You can also spread out your capital into 4 separate deals ($50k) opportunities and plug in with those operators and see which ones you gel with best. 

Happy investing!

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