what to do with 100K after cash out refinance??????

32 Replies

You want get your max money back in the pocket when price are high, You want to cash out finance from 15 year at 3% interest rate and lock in with 30 year 4.5% low interest rate, but inventory is low and price are high, no deal now.

what would you do with 100K after cash out refinance but you cant find RE deal?

Be a private lending for 8-10%??

I like to see open discussion.

Thanks

Long Khang

I'm in the same boat.  Private lending or stockpile cash till the next correction, I guess.

If you are skilled at vetting people and deals, private lending is probably a good option.  It will also help you hone your RE deal-finding and market analysis skills.

I'll gladly take it for 8% to get my portfolio going!

I am still a newbie investor, but try to take advantage of low rate and lock in with 30 years before the rate going in up some time next years. right now with 15 year at 3% $1,200 going to principal, but if i cash out and money sitting there doing nothing, i have to pay more interest for mortgage. I don't know how private lending work? I don't feel secure when doing that even locally.

Long Khang

@Joe Villeneuve low inventory in Boston, price sky rocket, bidding war. Do you have deals from Des Moines, Iowa, I have my relative there.

Originally posted by @Long Khang :

@Joe Villeneuve low inventory in Boston, price sky rocket, bidding war. Do you have deals from Des Moines, Iowa, I have my relative there.

 No, but I have an overload in Michigan.

There are great RE investment opportunities in Kansas City and Cleveland to purchase a Turkey income property for 45,000$-$70,000 at 12-14% cap rates.

Go to Vegas get some cocaine,hookers and have a great time at the poker table!

No seriously, I would not put it out as private capital I have seen too many people lose their money if they don't make a good living decision and they are stuck with a note they are paying on.
I am not sure of your skill set or experiences, but I would be very sure you know what you're doing before throwing your own money on the line too quickly.
One strategy that works well is buying turnkey properties below market value that are sold a lease purchase already. I do a lot of these types of deals with out-of-town investors in the Cleveland suburban market and it works well for them.
( this is not a pitch for you to buy a property from me, please don't remove this post, LOL)
For example… If you buy a home in a market for less than $100,000 and that is all fixed up and nice and ready to go and you can sell it on a lease purchase for $159,000 and $1250 per month on a 35 month term, giving them 20% rent credit for on-time payments and taking a $7000 down payment that you credit 100%towards the purchase price, then you help them fix the credit over the three years and they cash out and you make a pretty nice payday without a lot of risk. That is the plan that works best for us in our market for our turnkey product, You just have to know what your most comfortable with.

Good luck, and spend slowly, LOL!

There is a untapped flip market that you may think about. It's something I'm working on w/my flip investors.

@Long Khang   Welcome.

Isn't that $100k enough for a down payment on a purchase of your own? Especially if you're not secure with private lending.

@Long Khang  Your situation is something I'm approached with on almost a daily basis now.  You are not the only one who's market is, nicely put, a "challenge" for RE Investing.

Finding a different market is a great way to solve that problem though.  There are many ways to invest out of state, but it usually starts with a great (not a distant/surface) knowledge of the market you want to move your investing to.  A partner with boots on the ground would do nicely here.

I work with a number of out of state investors as their "boots". In any case, which ever market you decide (if) to invest, with that kind of cash to put out, you could be in a great position. The secret is to find a market where the rentals (with great cash flow) can be had for less than $100k (all costs), and have a much higher ARV, where the cost is around 70-75% of the ultimate ARV after rehab...and this isn't hard (at least it isn't here in Michigan, and many other midwest states).

@Charles Marchiondo,@John D.,@Nick Versetto,@Joe Villeneuve,@Lior Cohen,@Rob Gillespie,@Derrick Craig,@Connie Covert,@Mike Hurney

I might have to wait for a while to find the right deal.Thank you all for the input.

Long Khang

@Joe Villeneuve I have been following the "spill and clean up" that is Detroit, MI and trying to figure out where and when is the best time to strike. Do you have any advice? 

Right now, I have roughly 20-30k cash for deals. 

@Long Khang , personally I am still very new to REI so I would try to stay local. I am a buy and hold investor in a very "challenging market" as well. If my cash on hand was not enough to do another deal on my own, I would consider partnering up with somebody who is in the same boat I am. Potentially I would look for somebody who has a skill set that I don't have, like a flipper. By pooling cash and time/skills, I think a partnership on a project would be a great way for people to learn new aspects of REI and also to get your cash working for you.

Let us know what you decide to do!

Good luck,

Arlen

Look for a partner that has a deal and no money. You bring the money, they bring the deal and the work that comes with it. You will create a win/win situation. Obviously make sure you know the deal inside and out before you commit your money. There is always a deal to be had, you just have to find it! 

Originally posted by @Bayo Badejo :

@Joe Villeneuve I have been following the "spill and clean up" that is Detroit, MI and trying to figure out where and when is the best time to strike. Do you have any advice? 

Right now, I have roughly 20-30k cash for deals. 

 First, stop referring to it as a "spill and clean up".

Second, now is the best time to jump in...but you would need to have someone that knows the market well enough to point you where to go, and not to go.

Third, 20-30k ain't going to cut it.  The ones that will make it now, are the ones with the $1M cash available...so they can grab large areas. Small investors will needto wait until the areas to invest in are better established...which won't take place until at least another 3-4 years.  If you have someone in the area to work with, you can use the 20-30.  

Fourth, The suburbs are a better bet (and a great bet) for the 20-30k right now.  You can probably cash flow the heckout of it, while getting all of you cash back within the first 6 months.

Greatly appreciate your advice. Could you please suggest some zip codes to research? 

Thank you! 

@Bayo Badejo  The list is long, and if you're truly interested in this area, I would rather discuss it directly to avoid any confusion.  Connect me and we can set it up

@Long Khang  Maybe look for a local builder that would go 50% your cash 50% his and build some new construction. That is, if your market is strong and its a bidding war. Is it possible for each to throw in 80k and walk away with 90-100k in 4-5 months? 

If you make 90k, say in 6 months, that would be a 12.5% return on cash and if you do that twice in 1 year your at 25% COC .... Something to think about.

Originally posted by @Bayo Badejo :

@Joe Villeneuve I have been following the "spill and clean up" that is Detroit, MI and trying to figure out where and when is the best time to strike. Do you have any advice? 

Right now, I have roughly 20-30k cash for deals. 

No need to be in Detroit.  The inner ring suburbs are great for cash flowing properties.  If that is all you have you don't want to mess with Detroit

Originally posted by @Bayo Badejo :

Greatly appreciate your advice. Could you please suggest some zip codes to research? 

Thank you! 

go to google maps and find 696 it runs east and west north of Detroit.  All the cities that that highway runs through you can find good cash flowing properties for 30k 3/1 to rent out for 800.  Just make them a little better than the competition and you will beat down the doors.

we have so many landlords that think a coat of paint is a rehab.  I just listed my 2 bd for 775 and people are loving it.

Hey Scott K., 

Thanks for you input. I will check it out.