@Justin Wotring I think this answer depends a lot on your situation. Do you have the time, ambition, and skill-set to tackle some value add renovations? If so, maybe go that route and BRRRR a few properties to build some reasonably fast equity.
Or.... do you have no time or desire to work on and/or manage your own properties? Either because you just have no interest or maybe you work a 60hr/week day job that you love and pays you well. In that case I'd look at a much more passive route like investing in syndication deals or maybe just do some private lending.
Either way, I'd diversify in multiple property acquisitions or multiple investment deals so as to spread things out a bit. You'd hate to lose your entire $200k if something went sideways on one project.
I would likely take $50k-$75k of it and place it in mutual funds (for diversification purposes). The remainder, I'd jump start it on some brrrr deals (if could be found) and use it as seed funding to start that process. If no brrrr deals could be found, I think it would also be interesting to invest in some syndications with some top notch syndicators.
@Justin Wotring I think this answer depends a lot on your situation. Do you have the time, ambition, and skill-set to tackle some value add renovations? If so, maybe go that route and BRRRR a few properties to build some reasonably fast equity.
Or.... do you have no time or desire to work on and/or manage your own properties? Either because you just have no interest or maybe you work a 60hr/week day job that you love and pays you well. In that case I'd look at a much more passive route like investing in syndication deals or maybe just do some private lending.
Either way, I'd diversify in multiple property acquisitions or multiple investment deals so as to spread things out a bit. You'd hate to lose your entire $200k if something went sideways on one project.
I agree with Ryan.
The answer is "it depends".
If you want it completely passive, your options are: 1. REITs 2. Apartment syndication deal 3. Tenants-in-common where you own 50% (or whatever percentage) of the house while the active partner does all the work 4. Private lender 5. Buy land and wait it out
If you can put in the time, have the skills or can develop the skills, you can invest actively in real estate: 1. You can put $200K as downpayment on a $1M multi family 2. You can buy a house cash then do BRRR 3. You can buy non performing notes, foreclose on the property to own it, rehab it then rent or sell it 4. Or you can partner with other investors - say, with another investor who has the property and you can use $200K to renovate it, increase the rent and the value 5. Buy land and develop it or develop a lot from a landowner
@Jerry Padilla@Ryan Murdock I'm currently trying to BRRRR using my HELOC but have yet to find anything that hits my numbers. I love the hands-on aspect of BRRRRing a property, but I'm also finding that time is a limiting factor for me, as I have a 9-5 job with a 2-hour daily commute and a wife and 3 kids to come home to. Syndication, notes, and private lending are intriguing, but I haven't done enough research into these to feel comfortable.
Thanks @Michael Ealy! I love the hands-on aspects of buy and hold or BRRRR, but I'm finding that time is my limiting factor. Syndication and private lending are two options I'm going to start researching a little more.
@Dennis M. There are plenty of YouTube videos that show Results from buying 30k or more in lottery tickets. You probably win back 30-60 percent of whatever you spend on average..
I would buy a large commercial apartment building that is currently being mismanaged, with under market rents, utilizing seller financing if at all possible.
Personally, I would try to BRRRR. I really like the idea of recycling money while obtaining cash flowing properties. Close second would be down-payments on cash-flowing properties. Did you come into a windfall?
If you suddenly had $200,000, what would you do with it?
I'm on the same boat as you. I have access to about the same amount cash and trying to figure out which strategy would work best. I'm leaning more towards putting a down payment in a Multifamily Unit that I can force appreciation and hold on to. I'm just debating if I should stay local or open up to long distance investing which requires a solid team on the ground. Good luck on your journey!
@Justin Wotring buy 2 properties in GA. That the costs at closing will be covered by the 200k. Rent them and cash out refi both and purchase a 3rd property. All 3 properties will pay for themselves by the tenants and at 6.5 years you’ll be clear and free.
@Justin Wotring Looking into joining 3-4 syndication deals is definitely a more passive approach to investing it in real estate.
I’ve been working on the numbers for out of state multi family deals (about 60 units), and it’s truly incredible that you can still find deals that cash flow in today’s market.