Best place to invest $50K?

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Best place to invest $50K?

Kyle C.
Specialist · California, CA · Member since 2021 · 17 posts · 11 votes

Considering pulling out $50K from my home and investing it. In So Cal it doesn’t go too far, how should I invest it?

Interests:

- 2-4 unit investments

- Southern California

- Arizona, maybe Texas.

- Property Manager if out of state.

- Open minded to all recommendations

Thank you!

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Marc RiceBusiness Member
Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
5y

@Kyle C.

Columbus, Ohio - you can find single family homes starting around $50k in C- neighborhoods of Hilltop and South Linden. If you leverage with a 25% down payment on a multi family you can get a good 2-4 unit in a C to C- area.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    I'm assuming you'd be using that $50K as a down payment and not to buy a place with cash.  Look around at different areas you know for homes in the $200K price range-you'll need money for closing and other things, so don't spend the entire $50K.  Talk to your bank to see if you can get a mortgage for that amount.

    3Reply
  • Aaron W.
    Rental Property Investor · Northern Virginia · Member since 2019 · 793 posts · 620 votes
    5y

    @Kyle C. Before deciding what to invest in, what is your why in investing in real estate?  What goals do you need to accomplish your why? For example, are you looking for cash flow or appreciation? Do you need to have cash flow now or can it wait? What is your appetite for rehab? 

    Answering these questions can help you start to narrow to certain types of markets. You can then need to dive into specific markets that meet your investing goals.

    Good luck!

    9Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Kyle C.

    Columbus, Ohio - you can find single family homes starting around $50k in C- neighborhoods of Hilltop and South Linden. If you leverage with a 25% down payment on a multi family you can get a good 2-4 unit in a C to C- area.

    [email protected]614-363-2787
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    11Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    5y
    Originally posted by @Kyle C.:

    Considering pulling out $50K from my home and investing it. In So Cal it doesn’t go too far, how should I invest it?

    Interests:

    - 2-4 unit investments

    - Southern California

    - Arizona, maybe Texas.

    - Property Manager if out of state.

    - Open minded to all recommendations

    Thank you!

    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

    https://www.biggerpockets.com/blog/core-four-real-estate-team

    I invest here in Columbus, Ohio

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  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    There are a lot of different markets in the midwest you might want to check out. Depending on your goals there are a few that are different in Ohio. You might want to check out Columbus. @Kyle C.

    [email protected]614-963-3340
    2Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @Mike Baxter

    Thank you Mike.

    I’ve just been hearing some investors saying to put $10-$20K down; and that just seems so low for a down payment.

    In so cal I haven’t bought anything cuz I’ve been trying to put 20% down, and $50K isn’t enough yet here for 20% down.

    So I thought maybe I’m approaching this wrong and can start investing sooner than I thought.

    I’m looking for cash flow primarily. Appreciation definitely good, I’d leverage appreciation and not sell.

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @Theresa Harris

    Ya as the down. Just hasn’t seemed to be enough down in so cal.

    Can I get anything in AZ with this as a down? Since AZ is driving distance?

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @AJ H.

    Thank you AJ,

    Cash flow primarily.

    Appreciation ideally.

    Rehab is not a problem for me, I can either do it myself or hire, I have experience with that.

    Anything out of my area in so cal I’d have to hire that out and have a property manager.

    I’m just tired of waiting to have enough for a down in so cal. Was thinking maybe AZ was an option??

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @Marc Rice

    I’ve been hearing a lot of Ohio, I just don’t know anything about Ohio.

    Was hoping I could use my $50K on a duplex in AZ??

    What do you think?

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @Brandon Goldsmith

    Thank you Brandon,

    Can I get a duplex with a property manager that cash flows with my $50K as down and closing?

    How does the cash flow and appreciation look?

    I’ve never been to Ohio, AZ was driving distance, but I’m open minded.

    1Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    That is very doable @Kyle C.

    [email protected]614-963-3340
    1Reply
  • Enrique Garcia
    Specialist · Montebello, CA · Member since 2016 · 1 post · 1 vote
    5y

    @Kyle C.

    I am in the same situation. I would like to buy and hold. I was considering REInation for my first investment.

    1Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Kyle C. here is a theory...it really does not matter where you invest

    Here is the full post: https://www.biggerpockets.com/...

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  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    You can find this almost anywhere in the Midwest.

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  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    @Brandon Sturgill

    Interesting breakdown of the three options.  So the blog you wrote about a month ago was answering my very question!?  Does this $50K question get asked frequently?

    I like this quote from your blog "When I was first starting out in 2011 I was flipping properties...using bank funding and performing all the work myself...it sucked.?"  Ya, I don't want that.

    The cash-on-cash of 12% sounds good, how about the appreciation on the property to assist with earning more than only $6K at the end of the year?  Is there solid appreciation in these areas?

    I'm not sure if your calcs included property management?  I'd have to outsource pretty much all the work to someone local there since I live in CA and have a full time job. 


    Thanks!

    2Reply
  • Eric Schultz
    Investor · San Diego, CA · Member since 2016 · 265 posts · 305 votes
    5y

    @Kyle C.

    There are lots of other options for investing $50K passively or at least semi-passively:

    - Private lending / promissory notes

    - Multi-family syndications

    - Self-storage syndications

    - Short term rentals without owning the property (arbitrage or partnerships)

    There are a lot of investors out there that start with single family and small multi-family rentals. It can be a long, slow road building a portfolio. Maybe look at skipping a few steps and get into the more passive investments that many eventually wish to be in down the road.

    2Reply
  • Shiloh LundahlPro Member
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    5y

    @Kyle C. The simple answer to the question what is the best “way you should invest it” is with me.

    A more helpful, detailed, and serious response would be that the Arizona market has appreciated a lot over the past several years and the median price point would require a higher than 50k down payment. However, there are ways of investing (as you can learn about on BiggerPockets) where you can buy a property under market value, put money into the rehab, and then get it refinanced after forcing equity and you wouldn't need to leave all your money into the property as a down payment. This is often referred to as the BRRRR strategy. With new lending policies and criteria though, it is becoming more difficult, but you can still do it.

    Here is an example, yesterday I bought a triplex in Phoenix for 240k worth 340k. It is vacant and has already been renovated. I plan to rent it out and then refinance it and I plan to get a loan on it for 70% of the appraised value or 238k. With closing costs and carrying costs I will probably have left into the property around 10k - 15k but I would have captured 100k in equity and I’ll be cash flowing about $400 - $500 a month. But that is not the average deal that that the average investor can do in Arizona. So I would suggest connecting with experienced investors to learn how to invest more efficiently so that your 50k can go further.

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    2Reply
  • Pooja Raj
    Rental Property Investor · New York, NY · Member since 2020 · 4 posts · 1 vote
    5y

    @Kyle C. I was a similar situation in Jan with 50k and looking for places to invest. I settled on a brand new lennar property in San Antonio, Texas in 78254 area. Paid $216,499 for a single family home, expected to rent between $1525-$1550. I just closed last week. In the process of renting it out. Still new to investing so went with a brand new build.

    0Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Kyle C. No worries...yes, it seems like a lot of investors starting out usually have around the $50k mark to get going...its a solid amount of capital to start with if you are looking at residential MF properties.

    Appreciation is market specific as a first filter, zip specific as a second filter, neighborhood specific to base decisions on, and block or street specific to actually get accurate.

    Appreciation is usually predictable, even though most folks consider it "icing on the cake"...it is important to consider. The more important factor is buying at discount. Creating equity out of "thin air" ...one of the magical things about this industry

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  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    Hi@Kyle C.. I must say that @Shiloh Lundahl’s comment above is compelling. Think about this: you may want to consider imitating what the big guys are doing at your scale. @Brian Burke, who is one of the smartest apartment investors out there, and most experienced, lives in California but is investing in Arizona. His logic for rent growth in Arizona is hard to refute. It is probably also true in places like Utah and Idaho. If you can find a way to pay market value or less for assets in high appreciation markets, with safe leverage, you will probably do well. Good luck!

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    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    Thank you @Shiloh Lundahl 

    Yes, finding something under market value and rehabbing to full market would be amazing.  In CA here, even the rehab locations are selling for way too high.  

    What is the best way to find opportunities like this out of state (I do like AZ a lot); basically finding a good team in AZ to locate and manage?

    Thank you!

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    Are there cash flowing and appreciating opportunities in OH?  I get concerned that something less expensive in the mid-west won't have the appreciation.  Thanks @Brandon Sturgill

    0Reply
  • Kyle C.
    OP
    Specialist · California, CA · Member since 2021 · 17 posts · 11 votes
    5y

    Thank you @Paul Moore, I will follow @Brian Burke and continue studying.  I am very interested in CA or AZ, and I have decided I really do want to stick with 2-4 unit; I think that would be the most wise.  Now I just need to find the right property to utilize this first $50K to get started.  To find an opportunity in another state I think I need to find a team of people I trust in AZ. 

    0Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    5y

    @Kyle C. How much appreciation do you want? Ohio is appreciating faster than California...metro areas like Cincinnati, Columbus, and even minor metros like Dayton/Toledo are appreciating faster than San Diego. Here is our top 15 neighborhood appreciation over the last 5-years for Columbus MF

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  • Reece Iovine
    Realtor · Columbus, OH · Member since 2016 · 170 posts · 227 votes
    5y

    50K down payment will get you a solid duplex in a B area in columbus or a 4 unit in a C area. Great cashflow and appreciation here, worth looking into :)

    5Reply
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