What to do with $300k cash?

Question

Hi Guys,

I bet a lot of people asked that but I’m gonna try either way.

I got $300k in cash, the only experience I got in real estate is buying my own house and build an ADU to rent.

I’ve been looking around for the best way to start, and recently I’m going towards commercial real estate, apartment buildings etc...

Or

Just to buy a bunch of homes at around the 100k

With 20% down on each of them to maximize the amount of SFR.

What advice you would give me if you were in my shoes?

Appreciate it thanks .

James Wise · Answer

You can do some damage with $300k in a lot of markets. Below is a quick list in no particular order of markets that should have a lot of $100k or less properties in them. Of all of those markets I am the most versed in Cleveland so I have attached The Ultimate Guide to Grading Cleveland Neighborhoods for you to see what your $100k actually gets you in that market. That's the thing folks, you have to understand what your money gets you in other markets if you look at investing there. Just because it's cheaper than your own market doesn't necessarily mean it's automatically a great deal.

• Cleveland, Ohio
• Cincinnati, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

Jaron Walling · Answer

These posts are common in the forums so I encourage you find them in the search bar. That said $300k is a ton of money but money is only one piece of successful real estate investing. I'd get more pieces so you make educated choices when the boots hit the ground. You need the basics of REI before you do anything including market research, connecting with contractors, running the numbers on deals, estimating rehab cost, just to name a few. Leverage any skills you already have and solve a problem. It's a good way to find a deal and possibly the only way at this point due to the craziness that is 2021.

You can't just buy a "bunch of homes at around the 100k" and think you'll be successful. Multi-family, single family, it doesn't matter. Each has there pros and cons but all requires getting dirty and starting from the bottom. If you don't want to start at the bottom you're going to pay someone else to do it.

Ray Hage · Answer

Congrats on having 300k to invest! However, money is not enough. You'll need to do your homework on finding the right properties in the right market. If you can, it would be nice to buy one larger property with multiple units (assuming it is priced right, has good cash flow and potential for good appreciation, etc). It is hard to say without analyzing a specific property but I would probably wouldn't buy a bunch of SFH or condos as my first choice, that is generally speaking, of course.

Joseph Schweizer · Answer

Hi @Joseph Ovadia!

I will echo others and say educating yourself on how to analyze markets and on the different RE investing strategies is very important. You will also want to pick a strategy that aligns with your overall goals for investing in RE. The two strategies you described have some very distinct differences and you will want to clearly understand those differences before deciding on one or the other.

For myself, I work full-time outside of RE and I felt like turnkey would be a good way for me to get started with investing (see post below for my first investment). However, I still needed to know how to analyze markets and analyze properties to understand the investment. Also, I needed to understand how to build a team and make sure I was working with trustworthy and knowledgeable people.

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

You are definitely at an advantage for getting started in RE since one of the biggest hurdles is having capital to invest. I would recommend making sure you gain a base of knowledge about the different strategies and identify what strategy best fits your goals before making your first investment.

Best Wishes!

George W. · Answer

the answer to how someone would use 300k is diffrent for everyone. In my market you will not find "a bunch" of homes for 100k each and rent them out right away without some major work. Even houses that are total rehabs are pushing 200k in my area right now.

That Being said you could flip a SFH for a nice profit in my area with that amount of capital.

What to do with $300k cash?

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