Investor · Carolina Beach, NC · Member since 2018 · 188 posts · 377 votes
Just had a call from a friend and future partner who is under contract to sell a small boutique hotel and a triplex. After taxes he’ll be sitting on 1 mm in cash, and there is probably 6 months before the next deal that we take on. What do you do with a million in cash for 6 months? Stock market is obviously out. Unfortunately there are not very good options for short term cash. Interest rates were cut in light of coronavirus by 75%. Keeping money in cash is probably the safest thing you can do only because investing in bonds right now is a complete crapshoot. CDs are the safest option, but there has to be a better option. Short term hard money lending?? Maybe for a couple hundred, but 1 mm is too much to underwrite. What would you do?
Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y
For six months I'm probably doing a high interest savings account that hasn't been cut yet like Ally bank or something like their no risk CD. I'd probably stay away from money market accounts just in case they break the buck again, although I think they have more legislation in place to prevent that. It will be tough to find a short term spot for HML that will be willing to guarantee to pay back in 6 months.