50k in hand, what next?

Question

Hey guys!

So we sold a property and rolled part of the funds into an STR in Tennessee. We have 50k left over and are unsure what to do with it now. We can not get traditional financing at this time because we have 3 total properties under fanny and freddy... 2 properties are STR’s and one LTR. We are thinking of doing a BRRRR or a flip but we can’t decide what to do...

Thoughts?

Thanks!

Skye

Jaspreet Baveja · Answer

@Skye Penland - You should perhaps consider either lending to a flipper or go into a JV with one and share the profits. Quicker and better ROI, yet still secured against an asset... I know that's what I would do! Best of luck!

Scott Hamilton · Answer

@Skye Penland

Im in a similar situation and agree with @Jaspreet Baveja. Im currently looking to do what he mentioned

Passive investment is fine, especially if you have other rentals producing profits to hold against paper losses associated with being a LP. With that said, returns are typically 8-12% CoC and ties up money for usually 3-5 year minimum per the operating agreement. For that reason, I’m trying to go the flip route since I dont want to tie up the funds for that long. Just me $0.02

Beth Liesenfeld · Answer

@Skye Penland PM sent!

Skye Penland · Answer

Hello! Willing to hear where in Colorado! Shoot me a Pm.

Skye Penland · Answer

Thanks for all of the advice! If we do decide on a BRRRR... should we be worried about the “rent” portion? In order to refi we need to show a lease etc. with moratorium on rents I wonder about its viability?

Beth Liesenfeld · Answer

It depends on what you need and your individual goals, right? Do you want to build more passive income or do you want to build that 50,000 quicker with a more active strategy? That's how we usually decide if we want to go long term rental or something like a flip. (STR is in-between depending on your returns from your area and if you have it managed, right?) If you are looking for someone else to get you a return on that 50,000 I'm sure we could find a spot here in Northern Colorado to get you a nice return! :) For our LTR we have properties in TX as they are less of an entry price. Good luck!! It's such a nice problem to have too much cash!! :D

Marlen Weber · Answer

@Skye Penland sure, check out this article with tons of details: https://smartcapitalmgmt.com/m... Hope this helps.

Skye Penland · Answer

I agree, we are leaning towards a BRRRR...

Skye Penland · Answer

I feel like I want to use this money to further my own active portfolio before I start investing in that route. Or find an apartment to syndicate into.

Taylor L. · Answer

Typically referring to passive syndication investing. There are many assets you can invest in via syndication, with a few of the most common assets being multifamily, self storage, mobile home parks, and triple net commercial properties. Passive Investors in syndications (typically called Limited Partners or LPs) do not put up their credit or qualify for the financing, that's on the sponsors (aka General Partners or Syndicators) to handle.

50k in hand, what next?

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