Let's say you won the lottery ...

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Let's say you won the lottery ...

Hugo McBride
Investor · Tucson · Member since 2018 · 18 posts · 5 votes

How would you invest say $800k?

[...it is a smaller more winnable

 lottery ;) ...]

I often ask this question to friends to show them that one does not have to wait to learn and have a strategy. 

This time I'd like to ask the successful people in the group how they would invest that $800k. 

1Reply
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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
3y

Take the family on vacation...and then buy one or two rental houses (for cash or low leverage) in a growing market where prices have dropped 10-20%.  Everyone has different goals; so, the strategy will vary accordingly.  Or, stick it in a US Treasury or a CD and get 5% risk free.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    3y
    Quote from @Hugo McBride:

    How would you invest say $800k?

    [...it is a smaller more winnable

     lottery ;) ...]

    I often ask this question to friends to show them that one does not have to wait to learn and have a strategy. 

    This time I'd like to ask the successful people in the group how they would invest that $800k. 


     continue doing what I have been doing, investing in distressed mortgage notes.

    7e investments53 Reviews
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    4Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Buy one large multifamily property that cashflows 10k. 

    4Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    3y

    I might have some fun with it. There are two sisters in WA state. One is a realtor and they work with owners who are having problems selling their home.  They pay for the renos, relist the home at a higher price and split any profit (after the renos are paid for) between them and the seller.  Doesn't work for all houses, but it would be fun to do.

    2Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    3y

    Take the family on vacation...and then buy one or two rental houses (for cash or low leverage) in a growing market where prices have dropped 10-20%.  Everyone has different goals; so, the strategy will vary accordingly.  Or, stick it in a US Treasury or a CD and get 5% risk free.

    5Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    3y

    Do again what got me the $800k in the first place.

    In this market I'd split between 5% risk-free couch returns and blue chip dividend payers.   

    Commercial multis have 1M new build units hitting this year and Commercial credit markets are wonky.   

    4Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Hugo McBride:

    How would you invest say $800k?

    [...it is a smaller more winnable

     lottery ;) ...]

    I often ask this question to friends to show them that one does not have to wait to learn and have a strategy. 

    This time I'd like to ask the successful people in the group how they would invest that $800k. 


    1. 20% goes to special financing Interval Fund as robust cash flow income.
    2. 10% goes to my futures trading account
    3. 10% goes to index/bond
    4. 10% goes to MultiFamily Class C syndication in...Ohio LOL
    5. 20% goes to Software VC syndication
    6. 30% goes to all BRRR project that I could handle myself.

    I may invest to syndication that invest in NBA team as well.

    All while living in Mexico or Bali and still have my W2 job LOL

    4Reply
  • Neil Cronkrite
    Investor · Wheat Ridge, CO · Member since 2013 · 75 posts · 41 votes
    3y

    I'd personally use 75% to invest in a variety of CRE syndications and become a full time passive investor. The other 15% I'd spend on investing in small businesses for fun. The last 10% I'd split across 2-3 vacations for my family.

    3Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    3y

    If I was new to real estate, I wouldn't touch that money.  I would first learn to make it on under 20k via wholesaling or listings/selling.  Once I have done a couple hundred deals, I would know exactly what to do with the 800k so my risk is very low.

    3Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y

    Great and interesting responses, there are so many different things that people can do.  Even the one with helping owners reno their properties so they can sell and split the profits, sounds like a lot of work but hey, it's another way.  These responses just got me more questions!  Keep the responses coming, anyone else?

    0Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Don't know much about this. How does this work?
    0Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Quote from @Eliott Elias:

    Buy one large multifamily property that cashflows 10k. 


     What kind of multifamily property, apartments? build-to-rent? reno a hotel into condos? do it all cash or leverage? where would this be? how do you go about finding this deal?

    0Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Quote from @Mike Dymski:

    Take the family on vacation...and then buy one or two rental houses (for cash or low leverage) in a growing market where prices have dropped 10-20%.  Everyone has different goals; so, the strategy will vary accordingly.  Or, stick it in a US Treasury or a CD and get 5% risk free.


     Vacation sounds nice, where would you go Mike? 

    Also, 1 or 2 homes will get you about what $4-5k a month net (?). Isn't it better to leverage and get like 10 homes with a smaller cash flow?

    You are right about everyone having different goals but this goal is to use this money to launch into bigger things. 

    0Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Quote from @Steve Vaughan:

    Do again what got me the $800k in the first place.

    In this market I'd split between 5% risk-free couch returns and blue chip dividend payers.   

    Commercial multis have 1M new build units hitting this year and Commercial credit markets are wonky.   


     What 5% risk-free couch returns are you talking about? CDs? Treasury Bonds?

    Any specific blue chip dividend payers in mind?

    0Reply
  • Frank Patalano
    Rental Property Investor · East Providence, RI · Member since 2018 · 1k+ posts · 1k+ votes
    3y

    Since I am already spread across 9 markets in the US, I would make another international real estate investment. 
    Just another way to diversify outside of the US dollar.

    2Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y

     Man!!! Sounds like you've thought this through and splitting it all over the place, including your Class C syndication in Ohio haha and NBA team????

    All of this from Mexico or Bali??? You've got it made!

    0Reply
  • David Ramirez
    Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
    3y

    Multifamily! especially now that they are going to go for sale at a deep discount because of interest rates going up and owners holding variables loans form 2019- 2021

    1Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Hugo McBride:

     Man!!! Sounds like you've thought this through and splitting it all over the place, including your Class C syndication in Ohio haha and NBA team????

    All of this from Mexico or Bali??? You've got it made!


    It comes from experience and that 800k is from actual REI, not even a lottery so yes been doing that LOL. The key thing is diversification.

    I want investments in multiple areas that are not correlated to each other. There're few businesses that's inflation resistant like Legal Financing and such, so if real estate drops, you still income from other asset class.

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    Multifamily. With the economy failing, people are going to need rentals even more...

    3Reply
  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    3y

    Year 1: Nothing. Put it away, carry on business as usual. I'd want to let this weird market pick a direction and give interest rates some time to tick back down a bit.

    Year 2: Start looking for value add commercial deals in A++ locations. Pick up a distressed office building or retail plaza, renovate, place tenants, and collect the rent.

    3Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Quote from @Neil Cronkrite:

    I'd personally use 75% to invest in a variety of CRE syndications and become a full time passive investor. The other 15% I'd spend on investing in small businesses for fun. The last 10% I'd split across 2-3 vacations for my family.


    This sounds interesting Neil. For someone who has won the lottery and may not have the financial knowledge and experience becoming a full time passive investor is a good one. Also leaving some money to play with and learn is good. Where does one find these CRE syndications and how do you evaluate them?

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

    Real estate can be an attractive option for building wealth, but it's important to do your research to make sure you buy in the right market and at the right price. Buying one or two rental houses in a growing market where prices have dropped 10-20% is one strategy that can yield good returns with relatively low risk if done properly. That said, everyone has different goals, so it's important to tailor any real estate investment strategy accordingly. If a less risky approach is desired, there are other options such as investing in US Treasuries or certificates of deposit (CDs) which offer almost guaranteed 5% return. Ultimately, careful consideration should be given when deciding what type of investments are best for you.

    [email protected]832-889-5607
    2Reply
  • Hugo McBride
    OP
    Investor · Tucson · Member since 2018 · 18 posts · 5 votes
    3y
    Quote from @Bruce Woodruff:

    Multifamily. With the economy failing, people are going to need rentals even more...


     Agree 100% 

    1Reply
  • Taylor L.
    Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
    3y

    More CRE syndications. The cash flow on 800k plus the cash flow I already earn would more than cover my family's cost of living, with some left over. I'd keep doing deals on the active side after that, as well. I have a certain net worth figure in mind, then once I hit that I'd look to donate or give away a big percentage of earnings above that.

    1Reply
  • Sally FairchildPro Member
    Investor · Newport Beach, CA · Member since 2016 · 106 posts · 84 votes
    3y

    @Hugo McBride

    Vanguard Index Funds

    1Reply
  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    3y
    Quote from @Hugo McBride:
    Quote from @Mike Dymski:

    Take the family on vacation...and then buy one or two rental houses (for cash or low leverage) in a growing market where prices have dropped 10-20%.  Everyone has different goals; so, the strategy will vary accordingly.  Or, stick it in a US Treasury or a CD and get 5% risk free.


     Vacation sounds nice, where would you go Mike? 

    Also, 1 or 2 homes will get you about what $4-5k a month net (?). Isn't it better to leverage and get like 10 homes with a smaller cash flow?

    You are right about everyone having different goals but this goal is to use this money to launch into bigger things. 


    Interest rates are higher than cap rates in most markets and values are declining; so, leverage is currently negative.  That's why so few transactions are discussed on the forums and all the conversation are about the "market".

    I am a buyer/builder and am using leverage but my unlevered return on cost is higher than interest rates.  That's tougher to do/find.

    4Reply
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