I have 250k to invest...what is the best way to start?

39 Replies

@Scott Louis

A lot of good advice and education on BP and that is one reason you are here. Hold on to the cash for now, there will be good opportunities coming for sure!

PS- Grant Cardone would be at the bottom of my list..

Ken McElroy is a wealth of knowledge and he has been through the tough times before, find him and learn! All BP podcast and forums are very valuable. Joe Fairless, Mark Ferguson, and Dan Handford and his partners are all great as well.

Hi Scott!

I believe it comes down to resources as well. Do you have the right resources availed to invest? You have the capital but you need the instinct, knowledge, and much more because you need to work with those to make your investments work. One great thing I suggest, which is what others are suggesting as well, is to look around here on BiggerPockets, look at these types of discussions where multiple views are shared on one issue, then also talk to others here on BP, build your network, and you will be ready to rock before you know it.

I would suggest for you to really learn the industry well.

As always with anyone, I would love to help you out more. Just give me a text here on BP.

Thanks,

Sean

Originally posted by @Jonathan R McLaughlin :

@Wyatt Franta can you explain why forgivable loans that retain workers (small businesses eligible for relief as well) why this would trigger a bloodbath? Or do u mean it’s a sign one is being anticipated?

Hey John,

You missed a key term there...A certain percentage of their workforce. I'm hearing it's rumored to be a 25% reduction cap. Again, don't quote me on this, I'm still reading this thing. I'm only relaying what I'm hearing from others interested in the ramifications of the CARE Act. 

So, forgiven grants and low-rate EIDL's for corporations who promise not to cut more than 25% of their workforce? Say no more. Cut overhead, continue stock buy-backs, business will continue as usual for the big boys. The expendable employees will be out without anywhere to turn as no one will be hiring in anticipation of the coming recession.

Again, I must reiterate, please don't take my word here. I'm unfortunately only playing he-said-she-said at the moment. If you can find any info that confirms or discredits my comments, please let me know. I'm trying to get ahead on this as much as the next person.

@Scott Louis

I'm not a Grant Cardone fan but a lot of folks like him. I think his marketing stuff is probably better than his RE stuff. He's such a terrible misogynist it's hard for me to listen to anything he does at all. Really get educated BEFORE you pick anyone that you want to model. Do you want to be Grant Cardone? Probably not. Be yourself, do the investing that works for you. I think once you get educated the right path for YOU will become clear. There is no best investment strategy or best market. There is only the best for you right now given your risk appetite desire to be active or passive. You can hear my story on my BP podcast #373. I was basically where you are right now 4 years ago. 

I actually think a duplex can be a great way to get started and get educated. You're going to make mistakes and there is so much you do not know. Why not try something low stakes to see if you even like being active? Why not go through a rehab and getting a loan? If you don't like it, then you'll go for being passive. If you do then you can keep going and buy more and more. I would really encourage you to put your money in a high yield savings account and just get educated. Liquid cash is very valuable and may become even more valuable in the coming 3, 6, 12 months. Only time will tell. 

@Wyatt Franta ah ok, I see where you are going with that. The bills actually a bit better on those fronts than you feared:

Final senate bill set the unemployment amount at 10% can’t imagine the house lowers that bar in the final version but can’t remember. We should be very grateful if near term unemployment doesn’t spike WAY beyond 10% so that is an incentive not a floor

Extension of unemployment benefits to 3 years, the $600 a week boost and the opening up to independent contractors a huge boost there

No stock buybacks and no real raises in CXO compensation for 3 years or term of the loan.

Even during the darkest recessions or depressions there are people who reap the benefits by understanding the commodities and needs during times like these. There are investment strategies out there that will soar right now and increase your capital significantly. You just need the proper guidance to see them.

Originally posted by @Scott Louis :

Thank you Lee, Ive been studying and tryin to learn as much possible right now due to the current economy...and I am  watching videos from Grant Cardone with Cardone Capital. He teaches to avoid anything less than 16 units. He also says theres 4 ways to invest in real estate (reits, do it yourself, or syndication, or his way where he puts his own money in) His strategy seems to be invest in the largest complex with a good cap rate and good cash flow, stay in for a few years and then sell it. Is he a good person to follow? Do you recomend do it yourself for starting out or a syndication? I am already invested in a few REITS 

Maybe I am one of the few here who's also a fan of Grant Cardone.  He's a salesman for sure, but I have watched some of his whiteboards and he knows what he is talking about, even though I don't follow him on everything.  I don't follow his advice about 16+ units - I only own two units but it's worked out great for me.  But I do agree with him on rent where you live but own what you can rent out.  I am also conservative with leverage which is why when we have a SHTF moment like we have now, I am going to get through it fine.

I am also going to be looking at buying another property, but I won't even consider looking for at least 12 months.  I know from 2008 that from the peak to trough it took 3-4 years in some markets so there's no rush for me to run out and buy anything until I have a good sense of where the market is going....

The thing with Grant is you have to be able to filter out the BS...half the stuff he says is really good info, and the other have is fluff. I dont think he is a bad guy I just think he rubs alot of people the wrong way because of his dynamic personality. I dont watch his "promo" style videos Ive been watching his older stuff from a few years ago called Cardone Zone where he has people call in and he analyzes their deals...

 

@Scott Louis I actually like his dynamic personality, he's funny and I find him very relatable.  But yes if you have a good BS filter you can easily parse through his sales talk and pull out the relevant info/details.  I also watch a lot of Cardone Zone videos, in fact I watched quite a few last weekend because I wanted to get his take on everything that's been happening the last few weeks.  I like his perspective on things and he's a good motivator.

Given the Coronavirus situation and the calls for rent control and all. that, I don't see how you can do anything but continue to educate yourself -- as many here have suggested -- and wait until you see blood in the water with the people who leveraged without sufficient reserves. THEN buy.

@Scott Louis

I have a development company focused in NJ. We are currently seeking investors to come on board for a few projects we have coming soon. We offer 12% yearly return.

If you’re looking for something completely passive, let me know.

We’ve done over 30 flips in the last 2.5 years. We provide quarterly updates as well as bi-weekly calls/video calls to keep our investors informed.

@Scott Louis I would by direct as opposed to other sources especially getting into the game. You learn so much more by being hands on with your property.  I also would get in the game now.  Everyone thinks this is a repeat of 2008, but its not.  Totally different circumstances driven by different factors.  I am seeing a slight drop in prices, but as you know Nashville inventory is so tight its not affecting that much.  Despite that I am already seeing a drop in prices with the properties that our investors are buying.  Also, I would buy now because if everyone (ibuyers, REITs, New and seasoned investors, etc.) is waiting for a few months to buy, then you will have much greater competition then.  Everyone will want a stab at the market then.  As Warren Buffett says, "when people are selling I'm buying and when people are buying, I'm selling".  Take advantage of it now while buyers are on the sidelines.  You have more to choose from and subsequently more to benefit from.