What would you do with $200k?

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What would you do with $200k?

Austin Sisk
Member since 2022 · 2 posts · 3 votes

If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 

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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
Quote from @Austin Sisk:

If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


 Pay off any consumer debt I had.  Risk-free,  tax-free, hassle-free.   

Then I'd repeat what earned me the $200k in the first place. 

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y
    Quote from @Ryan Rock:
    Quote from @Theresa Harris:

    I really think it depends on your personal financial situation.  If I had non-mortgage debt, especially at a high interest rate, pay that off first.  Assuming that doesn't apply, use some of that to buy a rental.


     Technically the OP wasn't asking for advice. He asked what YOU would do. 


     It depends on what your goals are and the situation.  The why you are doing this is important.  If my goals and situation are very different than his, what I would do with the money is irrelevant.

    0Reply
  • Ryan Rock
    Sacramento · Member since 2019 · 54 posts · 24 votes
    3y
    Quote from @Theresa Harris:
    Quote from @Ryan Rock:
    Quote from @Theresa Harris:

    I really think it depends on your personal financial situation.  If I had non-mortgage debt, especially at a high interest rate, pay that off first.  Assuming that doesn't apply, use some of that to buy a rental.


     Technically the OP wasn't asking for advice. He asked what YOU would do. 


     It depends on what your goals are and the situation.  The why you are doing this is important.  If my goals and situation are very different than his, what I would do with the money is irrelevant.


     To be clear, you object to his question. If that's the case, why chime in? 

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y
    Quote from @Ryan Rock:
    Quote from @Theresa Harris:
    Quote from @Ryan Rock:
    Quote from @Theresa Harris:

    I really think it depends on your personal financial situation.  If I had non-mortgage debt, especially at a high interest rate, pay that off first.  Assuming that doesn't apply, use some of that to buy a rental.


     Technically the OP wasn't asking for advice. He asked what YOU would do. 


     It depends on what your goals are and the situation.  The why you are doing this is important.  If my goals and situation are very different than his, what I would do with the money is irrelevant.


     To be clear, you object to his question. If that's the case, why chime in? 


     No. My point was just because person A would do something with the money, doesn't mean it is the right thing for person B.  We won't agree, so that is fine.

    0Reply
  • Jay ThomasPro Member
    Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
    3y

    Real estate is certainly a great asset class to diversify into. Whether you're looking to invest in residential or commercial real estate, there are many benefits that come with it. Real estate investments provide steady income, potential tax breaks, and appreciation over the long term. However, it's important to do your research before investing in real estate and make sure you understand the nuances of the market. Taking on a real estate investment isn't something to be taken lightly, so be sure you have a good understanding of the risks involved before diving in head first!

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  • Elias Osborne
    Real Estate Agent · Columbus, OH · Member since 2023 · 23 posts · 22 votes
    3y
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


    Hey Austin, I'm in real estate and can essentially give my knowledge on the field I'm in. With the subject being on the future. I would split that $200k into at least four separate amounts of $50k each. I would get with a hard money lender with good rates, use the $50k for down payment (save the rest for emergency funds), and find four properties in a good market; at least 2 MFH. They may need some rehab, but the lender would pay for that. Fix those properties up, throw tenants in there, cash out refinance and pay the lenders back. Now you have four properties that have cash flow set for the future, and depending on your numbers, possibly made income from the cash out refi.

    0Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    3y
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


     I would acquire more MFH in Columbus. The price to rent ratio makes it for great investments. Not to mention the appreciation has been 8% higher than the US national average, because of the high demand for affordable housing.

    1Reply
  • Justin Bauer
    Investor · Cannon Falls, MN · Member since 2016 · 149 posts · 55 votes
    3y

    I would just put it in my  whole life insurance contract and wait for my next opportunity.

    1Reply
  • Sadaf Mik
    Member since 2021 · 12 posts · 2 votes
    3y

    @Reed Rickenbach

    Which high yield is paying that rate?

    0Reply
  • Reed Rickenbach
    Real Estate Broker · Memphis, TN · Member since 2020 · 202 posts · 203 votes
    3y
    Quote from @Sadaf Mik:

    @Reed Rickenbach

    Which high yield is paying that rate?


     Betterment

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y
    Quote from @Elias Osborne:
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


    Hey Austin, I'm in real estate and can essentially give my knowledge on the field I'm in. With the subject being on the future. I would split that $200k into at least four separate amounts of $50k each. I would get with a hard money lender with good rates, use the $50k for down payment (save the rest for emergency funds), and find four properties in a good market; at least 2 MFH. They may need some rehab, but the lender would pay for that. Fix those properties up, throw tenants in there, cash out refinance and pay the lenders back. Now you have four properties that have cash flow set for the future, and depending on your numbers, possibly made income from the cash out refi.

    This is the kind of stuff that needs to get off this board.

    1)Find 4 properties for 200k in a good market.
    Go find 4 properties for under 200k in a good market, infact go find 2. Good luck. And if you can, take it a step further and find 2 MFH like you suggest.

    2) Go with a HML and put $50k down, save rest for emergency funds.
    You realize going with a HML and putting 25% down, you'll lose a lot in points & fees. You will put down 20%, at best, so 40k and be eating fees. And what emergency funds, do you understand the cost of doing business? You won't have emergency funds if you do this.

    3) They may need some rehab, but the lender will pay for it.
    No, you will in interest at minimum.

    Literally, nothing you said will apply. This is how you leverage and go broke. Also, gotta hope you didn't buy, rehab and try to re-fi in a falling knife market. If it's a growing market, you're not finding 4 under $200k.

    For $200k, go get two solid houses in growing areas putting $60k-$75k down(250-300k), keep 6-9 months of reserves + cost of doing business(like entity structure, mortgage fees, initial vacancy, little touch up, etc.)

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    3y

    @Austin Sisk start househacking if I wasn't already and learn one niche really well after that

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  • Elijah ROberts
    Member since 2021 · 16 posts · 5 votes
    3y
    Quote from @Ryan Rock:
    Quote from @Elijah ROberts:
    Quote from @Ryan Rock:
    Quote from @Elijah ROberts:
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


     Depends on your situation. You could buy a cashflow positive property, sit on it and wait to appreciate as it generates income for you. If you have the time to trade, you could put into strong dividend stocks like $MSFT and buy-write call options on them. Put it in TFSA and buy growth - income ETF portfolio and rebalance once every 6-12 months.  


     But you know your situation. He asked what YOU would do, not what he should do. In my opinion this typeof question can be very helpful if people actually answer it, like the guy that said close on 4 duplexes in Killen. That doesn't mean the op is gonna do that, haha. 

    It boggles the mind that people can't seem to understand that. 


     I guess alot of things boggle your mind! But if this is the case, then I'm not surprised you haven't provided the OP your response / ideas, other than jumping on other people's contributions as a comment police. But again, it's all about the mind! Thats what separates one human from another! 

    I'm sure anyone with a mind that doesn't get easily boggled would deduce from my commentary as to what I'd do. 


     touche! And you're right, my mind is easily boggled. 

    Here's my answer: If I only had that much liquid, I would buy an investment property East of Utah in a city that fared well during the great recession. I'm sitting in cash right looking for places to invest. I keep looking at deals that seem promising then find a reason not to move forward. I plan to keep looking until I find something that suits me. My business model is sfh rented by the room to students and maybe mf. Prime states of interest are Ohio and Texas.


    I bought houses in Sacramento in 2006 and 7 that sold in 2011 for 1/3 of what I paid. I fear we are on the precipice of another big correction, but not half as bad as that. Then I keep thinking and overthinking that I must be wrong, because of job growth numbers and other positive signs for the economy. 

    I kicked *** by buying properties for cash (couldn't borrow conventional money because of recent short sales) in 2012(Sacramento and Tahoe), 2014 (Sacramento) and even 2021(San Diego). Sold the last one last summer. 


     I think the fear of a correction is all natural and justified considering the current environment. My attitude though, and I couldn't be wrong, is that it shouldn't matter as long as you can have them cashflow positive AND you are using the right investment vehicle. I am not sure of what vehicles you have in the US, (sorry, I am Canadian), but I use a Company here to own all my Real Estate. All my purchases are buy and hold (maybe forever); so, if I buy at high price and the market corrects making my property's value less, I will still be able to use Capital Cost Depreciations from the high book value of the property. Overtime, the Book Value will be depreciated to meet the corrected market value.

    0Reply
  • Greg Appelt
    New to Real Estate · Tampa · Member since 2022 · 20 posts · 12 votes
    3y

    Buy TSLA 

    0Reply
  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3y
    Quote from @Greg Appelt:

    Buy TSLA 


     That works. Can buy Caci international too.

    0Reply
  • Brandon RushPro Member
    Real Estate Agent · Portland, CT · Member since 2019 · 761 posts · 849 votes
    3y
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 

     Try to eliminate any big living expenses that are a burden. Ways to achieve this would could consist of:

    * House Hacking a multifamily and living for free (assuming you are renting)
    * Paying off any high interest debt
    * Paying off any cars
    * Paying off any other financial burdens that keep you up at night

    Then I would pick an investing strategy that resonates with me and go after it. Simple as that!

    Good luck!

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    2Reply
  • Priti Donnelly
    Member since 2023 · 26 posts · 13 votes
    3y

    If international hotel real estate appeals to you @Austin Sisk, we have 108 keys of a Wyndham/Ramada hotel in Thailand from which you would earn 100% revenue. It is a JV. The developers own the commercial aspect. This hotel is in development. During the development phase, the developers are paying 8% per annum until completion (2 years). With occupancy rates soaring, your returns once operational are projected to be upward of 10%. If that's of interest, happy to introduce you to the developers.

    0Reply
  • Jonn Vidal
    Bel Air, CA · Member since 2017 · 165 posts · 47 votes
    3y

    Go OFF-GRID!

    0Reply
  • Bryan MartinBusiness Member
    Accountant · Springfield, IL · Member since 2022 · 189 posts · 100 votes
    3y
    Quote from @Austin Sisk:

    If you were to wake up tomorrow with $200k, what would you do with it to generate income and set yourself up for the future? 


     Not necessarily in this order, but I would do the following: 

    1. - Pay off high-interest debt: If you have any high-interest debt, such as credit card balances or personal loans, it may be wise to pay it off first. By doing so, you can save money on interest payments and improve your credit score.
    2. - Create an emergency fund: It's always a good idea to have an emergency fund that can cover three to six months of living expenses. You can consider opening a high-yield savings account to earn interest on your emergency fund.
    3. - Invest in a diversified portfolio: Consider investing the money in a diversified portfolio of stocks, bonds, and other assets that align with your investment goals and risk tolerance. You can consult with a financial advisor to create a personalized investment plan.
    4. - Real estate investment: Real estate can be a good way to generate income and build long-term wealth. You can consider investing in rental properties or real estate investment trusts (REITs) that pay regular dividends.
    5. - Start a business: You can use the money to start your own business or invest in an existing one. It's important to do your research and create a solid business plan before investing.
    6. - Invest in your education: Investing in your education can increase your earning potential and set you up for a better future. You can consider going back to school, taking courses or certifications, or attending workshops to improve your skills and knowledge.
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  • Chandra Towns
    Member since 2023 · 12 posts · 7 votes
    3y

    Hello,

    If we woke up tomorrow with $200,000, we would do the following:

    1) Pay off all debts.

    2) Create an emergency fund.

    3) Invest it in real estate and other income-generating assets. 

    4) Go on vacation. We love to travel.

    1Reply
  • Jack Gorman
    Member since 2023 · 3 posts · 0 votes
    3y

    Pay off any debt first and foremost and emergency fund are good steps 1 & 2 like Chandra said above to establish a secure foundation for yourself. 

    Personally, I don't have any, so I'd immediately put $100k into my echotrading account - long term equity portfolios.

    Then I'd take $100k into rental property and learn as much as I can. 

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