25K Cash in Hand - What to do?
Bradenton, FL · Member since 2023 · 12 posts · 6 votes
25K Cash in Hand - What to do?
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Real Estate Broker · Palm Bay, FL · Member since 2017 · 175 posts · 89 votes
3yGuys, let's be honest, she said she has "CASH". AS IN, NOT DIGITAL FUNDS IN AN ACCOUNT... Sounds like she has green dollar bills. Someone told you correctly, you would want to get that money in a bank and let it season while you are figuring out where to deploy the future digital cash, unless you have a REALLY GOOD place to explain where that came from. I have literally had several instances where someone had massive amounts of cash under mattresses etc lol. If you are buying your first property, you could go 3.5 percent down FHA, or there are some really good 3 percent down Conventional programs with your score. Buy your first property as a primary residence, with the INTENT to live in it for a year, and then grow it from there! Over our way on the East Coast of FL has some really good options as well! Many builders of new homes right now are offering great interest rates / closing costs etc. Sounds like you are well on your way and came to a great resource!
34 Replies
- 3yJason WrayPro MemberBanker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
Claudine,
You can always buy an investment home with 15% Down and since you are in Clearwater, Florida there are some good deals just north of you in Holiday. There are also condos in Largo/Seminole for under $125K just be careful of the HOA fee's.
I am in Pinellas County as well and its tough around the beaches but inland offers a lof of deals. Including South St.pete all the way down towards Eckerd College.
- Bradenton, FL · Member since 2023 · 12 posts · 6 votes3y
Hi Jason,
I'm actually looking in the Bradenton / Sarasota area. Credit score is around 730+. Looking to turn this into a rental and move on to a next property. A realator said the cash has to be in a bank before applying for any type of loan and that is can't just be 'cash'. I'm just starting this journey and don't quite understand why the money has to 'age' in a bank and it must be your regular savings.. I'm a first time buyer so I understand there are several loans as we know... I'm just not understanding why this must be deposited. Tax implications? Proof of income outside of pay/credit/debt?
I guess I'm not sure how to ask the question correctly - Basically, her advise was/is "You must put the $25K in the bank and wait 90+ days before even thinking about purchasing"
Doing just the basic calculations - I do not wish to exceed $300-320K and would love to do a house hack.
I'm just stuck on the "you must put it the bank for 90 days' thing. She did not provide the reasoning.
Hoping I didn't make a head spin, mine is, scratching it.
Thanks for the response
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Books are good to an extent, a book will not find you a deal. Getting on the phone and making calls will. Read to sharpen the blade.
- 3yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
@Claudine Stering, I recommend speaking to @Josh Green. He has assisted quite a few investors in the area that I know, and am sure he can help you!
Helm Mortgage Corp.5125 Reviews - 3yRaymond J. RodriguesBusiness MemberLender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
@Claudine Stering, sounds like you need to speak to a lender that knows what they’re doing and not a realtor. I’m happy to answer questions that you may have!
Helm Mortgage Corp.5125 Reviews - Investor · MN · Member since 2022 · 3 posts · 0 votes3y
If you have a decent monthly check and any other reserves the 25K that you would be using for the investment shouldn’t be a problem.I suggest speaking with another lender about your options.
especially if you are planning to house hack and use the home as your primary residence.
the purchase of a primary residence should be fairly simple. - Investor · Vermont and New York · Member since 2023 · 308 posts · 309 votes3yMany loan underwriters get squeamish and want to know the source of funds. The realtor may be right for some lenders, but not for all. I wouldn't worry too much about where you have the money - that can resolve itself. Find and evaluate the deals.
Good luck! - Bradenton, FL · Member since 2023 · 12 posts · 6 votes3y
That makes sense.. so much better sense if just explained as you did. Again.. I'm just getting my feet wet and in the "let me learn and understand as much as I possibly can" phase. I get hyper focused on one thing until I know/understand the WHY. Thanks again.
- Real Estate Broker · Palm Bay, FL · Member since 2017 · 175 posts · 89 votes3y
Guys, let's be honest, she said she has "CASH". AS IN, NOT DIGITAL FUNDS IN AN ACCOUNT... Sounds like she has green dollar bills. Someone told you correctly, you would want to get that money in a bank and let it season while you are figuring out where to deploy the future digital cash, unless you have a REALLY GOOD place to explain where that came from. I have literally had several instances where someone had massive amounts of cash under mattresses etc lol. If you are buying your first property, you could go 3.5 percent down FHA, or there are some really good 3 percent down Conventional programs with your score. Buy your first property as a primary residence, with the INTENT to live in it for a year, and then grow it from there! Over our way on the East Coast of FL has some really good options as well! Many builders of new homes right now are offering great interest rates / closing costs etc. Sounds like you are well on your way and came to a great resource!
- Investor · Tampa, FL · Member since 2020 · 287 posts · 152 votes3y
@Claudine Stering Hey Claudine, you have a few options for sure. I think a low down payment on a small multi family property would be a great first investment in the Tampa metro area with a lot of upside and little risk. You will have low monthly expenses and get to learn real estate with training wheels essentially, as well as getting to enjoy the perks such as appreciation and tax advantages. As for the cash I’m sure if you speak with enough lenders one will have a solution for you and will allow the cash to be used once you deposit it. You could perhaps deposit it in something like an etrade brokerage account and on closing day wire funds from the etrade account to the title company. Reach out if you’d like to discuss further, I’m licensed and have worked with plenty of investors in the past as well as completing my own real estate investments in tampa as well.
- 3yJosh GreenBusiness MemberRealtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 395 posts · 353 votes
Quote from @Claudine Stering:
Hello all,
Just starting out and I've read so many books and still haven't found the right path/advice. I have 25K cash and have been told several 'must do' with. 1) Immediately put in your saving account 2) Put it in a high yield savings account 3) Must age/season for 3-4 months...
Where do I go to get the correct and best sound advise?
Thanks much!
Looking forward to do the 90 Day Challenge!
Regards,
Claudine
Hey Claudine,
It's the time-old tale and question: "what is the BEST thing I can do with "X" amount of money?". My answer is simple: you'll want to get consultation. I consult with my clients, because questions like this depend on a lot of different factors. For example, if you were my client, I would ask a few more questions to dig into your situation more so I can help guide you one what makes the most for your situation (all the while keeping the bigger goals in mind). Those questions are:
1) What are you short and long term goals (financially)? How do you plan on real estate being a role in those goals?
2) What is your current living situation, working situation, savings rate, etc?
3) Is your budget balanced?
4) What are you trying to accomplish with that money? What is your risk tolerance? What is your investing experience?
5) What options have you explored (financing, investment funds, research/reading/podcasts)?
Those are just some of the questions that would begin our conversation. Like @Raymond J. Rodrigues mentioned above, this is the type of approach and relationship I like to establish with those I work with. As a former engineer, one the most important learnings I gained was that you can't solve a problem that you don't understand and that solving problems is all about asking the right questions and making valid assumptions. Luckily, with $25k, there's not a whole lot of problems to solve. It's a rather small amount in the grand scheme of investing. That said, most of us investors probably started with a house-hack around that cash amount. My first 2 househacks only cost me around $35k and $40k each. If you're looking for some guidance, especially here in the Tampa Bay area, you can always DM me and we can get on the phone to consult together and see what makes the most sense for you.
Impact Realty Tampa Bay.4.962 Reviews
Suncoast Vacation Homes4.959 Reviews - Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
Buy a multi family for 300K. Put 3-5% down. Let other tenants pay all the bills. Refinance. Buy another. Keep going until you're financially free.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@Claudine Stering I would invest in high yield savings - keep learning and keep it liquid so when an opportunity comes by take advantage of it
7e investments53 Reviews - Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
I'd find a local bank or CU that has no monthly fees and gives back to my community that is cash friendly. Bonus if they allow cash deposits at their ATM.
High yield is secondary to no fees and cash friendly. An extra .25% doesn't really matter.
Dribble the cash into your new savings acct. If you show up with $10k or more, you have to provide all your info and answer questions by law. My Chase accts make me answer questions if I deposit any cash at all, but will allow 30 bills at a time deposits at their ATM. Go figure.
You will need 3 months of seasoning post cash deposits. The lender will look and say 'explain this deposit' if it's within 3 months. This will take at least 5-6 months.
5-6 months is the perfect amount of time to educate yourself, save more and create a great deal!
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Claudine Stering:
Hello all,
Just starting out and I've read so many books and still haven't found the right path/advice. I have 25K cash and have been told several 'must do' with. 1) Immediately put in your saving account 2) Put it in a high yield savings account 3) Must age/season for 3-4 months...
Where do I go to get the correct and best sound advise?
Thanks much!
Looking forward to do the 90 Day Challenge!
Regards,
Claudine
depending on your income level and accreditation status, if you are Accredited investor you could invest to 'okay interval fund' that's specialized in financing, may return you 6-8%.
- Real Estate Agent · Indianapolis, IN · Member since 2022 · 45 posts · 52 votes3y
Get a team around you. The BiggerPockets community is a very effective and generous tool, not a team -- but can help guide to you to a team.
You can consider adding the following Teammates:
1) a Tax pro
2) a local real estate agent who is a high performer..this person should be able to feed you a TON of resources
3) financial advisor
4) possibly a lawyer
I'd encourage limiting the amount of influence amateurs have with your money and decisions...you probably already know that. If you are looking for real estate insight, these forums hold so much value for you. Then consult with your local team to create a plan and take action. - Investor · Baton Rouge, LA · Member since 2019 · 184 posts · 167 votes3y
First, start with 3 months worth of your normal expenses in an emergency/high yield savings account. There are plenty out there giving away 3-4% yield. Once that is done, take the rest and follow some of the advice already mentioned above. I like the 300K multi-family house hack idea if you can swing it. If not, an SFH while renting out other rooms is also an option. It all depends on your goals and lifestyle.
- Bradenton, FL · Member since 2023 · 12 posts · 6 votes3y
Quote from @Dwayne Byrd:
Guys, let's be honest, she said she has "CASH". AS IN, NOT DIGITAL FUNDS IN AN ACCOUNT... Sounds like she has green dollar bills. Someone told you correctly, you would want to get that money in a bank and let it season while you are figuring out where to deploy the future digital cash, unless you have a REALLY GOOD place to explain where that came from. I have literally had several instances where someone had massive amounts of cash under mattresses etc lol. If you are buying your first property, you could go 3.5 percent down FHA, or there are some really good 3 percent down Conventional programs with your score. Buy your first property as a primary residence, with the INTENT to live in it for a year, and then grow it from there! Over our way on the East Coast of FL has some really good options as well! Many builders of new homes right now are offering great interest rates / closing costs etc. Sounds like you are well on your way and came to a great resource!
Yes! That is exactly the situation. It’s CASH… Not in a bank but in a safe place. This is from a family member who is putting money in.
So my next step is how to deposit it. Separate it.. several different deposits etc.
look at the tax implications etc.
I def need to get a team together. I’d like to invest as soon as possible.
Thank you for catching that - cash..
- Tampa, FL · Member since 2021 · 383 posts · 389 votes3y
If you received it from family, they can write a gift letter and/or as long as it came from somewhere and it can be sourced you can use it for a mortgage downpayment. I would double check with a seasoned and experienced mortgage broker. DM and I can connect you.
If you are looking to buy and build wealth, have you considered a FHA on a multi family?
If I could do it all over again and not have a spouse and dogs, etc. I would use my FHA loan for a 4 unit building. It is more difficult to house hack later in life if you have a larger family, so keep that in mind.
For example, in Hillsborough an FHA loan can finance up to $809,150 for 4 living-units. That is only 28,000 plus closing costs, very close to your 25k savings. Tampa, the main seat of Hillsborough county, has seen a cool off just like the rest of the country and getting a 4 unit in that price range is attainable.
I know you are in Clearwater but I am I am bullish on Tampa because of Bill Gates multi billion dollar investment into downtown Water Street and the GasWorxx projects, both are transforming large swaths of the downtown and the urban core.
Feel free to reach out with any questions!
- Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes3y
Hi @Claudine Stering...we're neighbors! From a lender's perspective, you have several choices depending upon where the money comes from. We'll usually request 2 months of bank statements to "source" the funds, meaning show where the money came from. This is a legal thing and not a lender choice. Lenders are required to do this as part of a legally required Anti-Money Laundering (AML) program. If the money is "seasoned", meaning it shows up on the beginning balance in the oldest of the bank statements, you're good to go. If it comes in later, then we'll have to show the "source" of the funds to satisfy AML requirements. If you sell a property or asset to get the funds, then we'll want to see the settlement statement and create a paper trail to show the flow of funds to your account. If it's a gift, lenders will want a letter from the donor (most lenders will require it to be a family member or someone very close to you...it varies from lender to lender) and many lenders might even want to "source" it by getting donor bank statements. The toughest is money that you have hidden under your mattress. It's pretty hard to create a paper trail for that (ethically). With that, you might just have to introduce it to the banking system by depositing it into your account and then waiting for it to show up in your bank account. One item to note about that - banks are required to file either a Large Currency Transaction Report (LCTR) or a Suspicious Activity Report (SAR - if it appears you are "structuring" your deposits to avoid an LCTR). Contrary to what people think, as long as you got the money legally, this isn't a big deal. Just let the bank fill out the report and don't worry about it. Once that money shows up in the beginning balance of the first of the two bank statements, you should be good to go. I hope that helps you.
- Bradenton, FL · Member since 2023 · 12 posts · 6 votes3y
Quote from @Doug Smith:
Hi @Claudine Stering...we're neighbors! From a lender's perspective, you have several choices depending upon where the money comes from. We'll usually request 2 months of bank statements to "source" the funds, meaning show where the money came from. This is a legal thing and not a lender choice. Lenders are required to do this as part of a legally required Anti-Money Laundering (AML) program. If the money is "seasoned", meaning it shows up on the beginning balance in the oldest of the bank statements, you're good to go. If it comes in later, then we'll have to show the "source" of the funds to satisfy AML requirements. If you sell a property or asset to get the funds, then we'll want to see the settlement statement and create a paper trail to show the flow of funds to your account. If it's a gift, lenders will want a letter from the donor (most lenders will require it to be a family member or someone very close to you...it varies from lender to lender) and many lenders might even want to "source" it by getting donor bank statements. The toughest is money that you have hidden under your mattress. It's pretty hard to create a paper trail for that (ethically). With that, you might just have to introduce it to the banking system by depositing it into your account and then waiting for it to show up in your bank account. One item to note about that - banks are required to file either a Large Currency Transaction Report (LCTR) or a Suspicious Activity Report (SAR - if it appears you are "structuring" your deposits to avoid an LCTR). Contrary to what people think, as long as you got the money legally, this isn't a big deal. Just let the bank fill out the report and don't worry about it. Once that money shows up in the beginning balance of the first of the two bank statements, you should be good to go. I hope that helps you.
Thank you @Doug Smith - this makes perfect sense and saved so much time. I just started reading tax books Again, I’m someone that needs to always know/understand the WHY over the “trust me, this is what I do”.
@Doug Smithundefined
- Real Estate Agent · Columbus, OH · Member since 2016 · 593 posts · 664 votes3y
Quote from @Claudine Stering:
Hello all,
Just starting out and I've read so many books and still haven't found the right path/advice. I have 25K cash and have been told several 'must do' with. 1) Immediately put in your saving account 2) Put it in a high yield savings account 3) Must age/season for 3-4 months...
Where do I go to get the correct and best sound advise?
Thanks much!
Looking forward to do the 90 Day Challenge!
Regards,
Claudine
If you're in a position to house hack a property that's what I would do. With so little down it can help your money fo further. That's how I started in Columbus OH!
- Bradenton, FL · Member since 2023 · 12 posts · 6 votes3y
That's what I want to do - the properties I've seen, they are immediately pending. An option we're thinking is to buy a property, add on, and such. Then I'd buy the second one - this way we could take advantage of first time buyer. I've read on here there are other options - necessarily one may not need to do first time.
So many things bouncing around in my head.
- 3ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Normally I would tell someone to invest, as I normally would. My best advice to someone in your scenario is to keep saving. It sounds like a lot, but I always recommend someone to have at least 50k before investing in something with 20% down. If it is 3.5%, you could make due with 25k, but unless you are doing that, SAVE! If you want it this bad, you will find a way!
Sam McCormack Realtor - Real Estate Broker · Tampa Bay · Member since 2020 · 43 posts · 25 votes3y
I'd pay off any high interest debt first, if you don't have any then continue to save. If $25k is most of your nest egg you need to save more, if $25k is what you want to invest, you might be able to partner with someone but typically 50k+ is what we have seen in the past where you might get to get your feet wet on a deal. This could be lending your capital for a 6-12 month period as it won't likely be enough for a down payment but it could if you could qualify for a property to live into with 3.5-5% down. A few variables here depends on your goals, etc. just my 2 cents.
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