Hypothetical Question: Where would you invest 1M right now?

San Francisco, California
Personal Finance
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Hypothetical Question: Where would you invest 1M right now?

Brian Cassanego
Member since 2022 · 24 posts · 9 votes

And the goal is maybe around 70% cash flow and 30% equity growth, so definitely interested in more cash flow.  Also, maybe a 40% risk profile, so some risk is fine, but rather be a bit safer.

Cheers! 

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
4y

Value add multifamily with modest long term leverage. Overall deal flow has slowed drastically for those who have maintained strict investing criteria, but there are still opportunities out there.

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  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y

    Value add multifamily with modest long term leverage. Overall deal flow has slowed drastically for those who have maintained strict investing criteria, but there are still opportunities out there.

    1Reply
  • Taryn Reys
    Real Estate Agent · Fort Worth, TX · Member since 2022 · 13 posts · 3 votes
    4y

    I agree with Taylor. Any type of real estate to invest in is worth it. You might not have too much cash flow or any cash flow at all, but its all about in the long run. Houses 20 years from now are going to sky rocket in price. Get it while you can!

    0Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    4y
    Quote from @Taryn Reys:

    I agree with Taylor. Any type of real estate to invest in is worth it. You might not have too much cash flow or any cash flow at all, but its all about in the long run. Houses 20 years from now are going to sky rocket in price. Get it while you can!


     I wouldn't go that far! We're being very picky about what we buy. Increased values are not guaranteed.

    0Reply
  • Brian Cassanego
    OP
    Member since 2022 · 24 posts · 9 votes
    4y
    Quote from @Taylor L.:

    Value add multifamily with modest long term leverage. Overall deal flow has slowed drastically for those who have maintained strict investing criteria, but there are still opportunities out there.

    Taylor, what cities are you high on Multifamily presently?  
    0Reply
  • Chris Davidson
    Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
    3y

    @Brian Cassanego for the risk profile and equity growth I would stay smaller either SF or SMF and go in 50% leverage as almost anything will cashflow strong there. Focusing on starter homes/ starter investments. Sit on them for a few years when it is a stronger sellers market again roll them into larger asset and relax. We are seeing some really compressed cap rates on larger assets, and with lending reaching uncertain terms all it takes is a blow up of the corporate bond market on over leveraged companies to really hit the brakes on lending. In 2 years have an election and politicians always want things moving up during election years for the voters.

    However the biggest factor is what do you enjoy and want to do. 

    1Reply
  • Paul Vail
    The Triangle, NC · Member since 2021 · 189 posts · 117 votes
    3y
    Are you asking 'where' as in location/region or what kind of real estate or what kind of assets?

    You're in San Fran.  Frankly, anything that has seen a tremendous uptick in valuation/prices and rent and is peaking isn't maybe the best place to buy.  Buying at the peak and watching things get closer to underwater over the coming months of a recession would be painful.  If renting is the game plan, smaller cities that continue to have significant population increases and housing shortages would seem ideal for small multifamily.  Diverse industry/employment or something more recession-immune like state/federal government/military would be factors, as well.
    0Reply
  • Paul Vail
    The Triangle, NC · Member since 2021 · 189 posts · 117 votes
    3y
    Nuts -- meant to add in:

    If you are looking for real estate AND paper assets, the usual 'easy' answers of DRiP stocks or better yet ETFs based on DRiP stocks would be a slow value play, so says the financial gurus (I am NOT a CFA so this is just opinion).  Guessing the future is a fools game, but I think we have taken a LOT of the froth off of equities in the last 10 months, with more yet to come.  But let's pretend we are 75% or more of the way to where the equities market should be based on P/E.  Safe cash parking in laddered I-bonds (treasurydirect.gov) for year+ reserves and CDs for whatever the emergency fund needs to be.    So along with multidoor rentals in smaller stable cities/college towns, having diversified holdings in the paper investment sector seems to cover a larger base.
    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    3y

    Multi Family in the east bay with a mix of short term and long term tenants...or a house hack to reduce your living expense.

    Sprinkle in a little Midwest properties and you could likely offset the majority of your housing expense here in the bay area.

    i have a few properties in mind that would work happy to run the numbers on em if you are interested.

    0Reply
  • Colton Hahn
    Specialist · Member since 2021 · 322 posts · 273 votes
    3y
    Quote from @Brian Cassanego:

    And the goal is maybe around 70% cash flow and 30% equity growth, so definitely interested in more cash flow.  Also, maybe a 40% risk profile, so some risk is fine, but rather be a bit safer.

    Cheers! 

     I would invest in real estate syndication, not only do you get the obvious passive investment returns but you also get the tax benefits as well. The biggest hurdle is finding an operator you trust, in a region and asset class you believe in. The whole point of investing is to get high returns with little work, and those opportunities provide that :)

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y

    @Brian Cassanego

    Real estate fund focused on distressed debt paying monthly dividends.

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  • James Wenzel
    Investor · TX · Member since 2020 · 57 posts · 60 votes
    3y

    Sun Belt for everything.  Location is key.  Should be some serious deals in the next 3-12 months.  I put 80% of my stuff in cash flowing/value add products then the other 20% in developments etc...

    0Reply
  • Paul Vail
    The Triangle, NC · Member since 2021 · 189 posts · 117 votes
    3y
    Quote from @Chris Seveney:

    @Brian Cassanego

    Real estate fund focused on distressed debt paying monthly dividends.


    That's an interesting idea with how markets are presently drifting (both financial and RE).  What would be your top three if you were to want to research more?
    0Reply
  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    3y

    Hi @Brian Cassanego! Great question and you got some great responses above. 

    I am in my third decade as a real estate investor. I've done single family, flip, rentals, built some from the ground up, rent to own, mobile homes, a small subdivision and I eventually graduated to an array of commercial real estate investments. Hands down I would recommend a diversified portfolio of commercial real estate. 

    I would start by getting @Brian Burke's excellent book The Hands-Off Investor. This will help you vet experienced syndicators and fund managers. If I had $1 million to invest, I would spread it out over several carefully vetted operators. 

    That's my 2 cents! Happy investing!

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    1Reply
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