Unable to work but Inherited 100k. What to do?

Question

Hello,

I miraculously inherited about 100k from an aunt of mine who I barely knew.

I am 25 and have had health problems for the past several years that have left me unable to work for long periods at a time. I am currently driving full time for Uber and Lyft but am about to have a couple more surgeries that are going to leave me unable to work for another several months.

When I am all healed up I want to go all in on real estate investing with the money I inherited.

From what I gather it would be very hard for me to get a loan because I don’t make very much money, don’t have a consistent work history, and have very little credit history.

Just buying one home completely in cash doesn’t seem like a good strategy, since I would have to live there, I wouldn’t have one to rent out.

Would it be even be possible to buy more than 1 home with 100k or less in the US without loans?

I want to make real estate a full time thing, I am a very hard worker and would be willing to move ANYWHERE in the southern US to do it.

I am not sure what my options are. I am going to do a lot more research,  but if any of you have advice for me I would appreciate it very, very much.

Thank you

David Ivy · Answer

@James Borden

As a young person with health issues, you probably don't have much in savings. If not, then before putting a penny into real estate investment, I would figure out how much money you'd realistically need to cover your necessary expenses for 3-6 months and set that aside that portion of the $100k in an emergency fund account that will earn interest. I use Amex Personal Savings for my family's emergency fund, which is online and currently paying 1.35% APY. Also, before putting a penny into real estate investment, I'd take a portion of the $100k to pay off any high interest debt (10%+) that you have been carrying (e.g., credit cards). That's an easy way to get a guaranteed immediate high return on a portion of the inheritance. A lender may require that you pay that off anyway to qualify for a loan.

Once you have the 3-6 mo. emergency fund and paid off high interest debt, I'd personally probably be looking at paying off any moderate interest debt (4-5%+), opening an IRA, and setting aside a portion of what's left of the $100k to make max contributions for at least the next few years until I knew I could set aside enough income from my job yearly to make the contributions myself. Either way, you could also now think about using what's left as a down payment on your first property, which should probably be a single-family or duplex value-add house hack in Austin (or maybe a more affordable market). As you said, your current situation and work history will probably require an investment partner or someone to co-sign on the loan.

Ivan Barratt · Answer

@David Ivy has some good suggestions @James Borden. I would further that by saying keep your money in the bank and get more education.  A fool and his money are soon parted! Start with Robert Kiyosaki and Grant Cardone but realize this! Their rise to great wealth did not start with real estate!

Thomas S. · Answer

In light of the fact that you are unable to do any form of physical work you would be best to find a partner with good credit and work history. You would then be a 50/50 partner providing the money.

Derrick E. · Answer

@James Borden

To quickly answer your question, yes you can buy multiple homes in the US with $100k/cash.

I would strongly consider the MidWest. The 5 homes I bought ranged in prices from $7,000-$30,000. I currently bring in $2,100/month but I don't have one of them rented yet and that will put me up to around $2,700/month and I own the homes free and clear. Feel free to send me a PM if you want.

Luke McCann · Answer

Several strategies come to mind, especially because you seem very willing to hustle down the road. If I were you, I would consider @Brandon Turner's infamous "BRRRR" strategy on a multifamily. You could link up with a connected real estate agent that will send all multifamily listings your way. Of course, with $100k, your search will be somewhat narrowed but it is still very possible.

Once you've got the multifamily up to par and fully rented, approach a lender about cashing out and borrowing against your equity, aka refinancing. You could then take this and invest in another property or two, while enjoying the cash flow of your first property.

That is just what I would do. Of course, you could try flipping, vacant land investing, or investing in a REIT. I would recommend exploring all of these routes and seeing which one gets you excited and maps to your life goals.

Good luck, and if I can be of any help to you along the way, don't hesitate to reach out!

Arnie Abramson · Answer

James.  I do tax deeds in Texas and looking for contacts in Austin and elsewhere in the State.  Please send me a PM and i can discuss in more detail.

Carrie Hiner · Answer

Wishing you a speedy recovery on your up coming surgeries.  Maybe buy a duplex and live in half?

Joe Mclain · Answer

@James Borden Being in Texas, you might want to try the tax deed route.   Start with your county tax assessor and research what the local rules are, where they hold the auctions and what the properties are selling for.   If you hit a big crown in your county consider going to the next county.  In TX, you guys have a 1 year right of redemption and I think your interest rate is 25% which is really good.   Join the Bigger Pockets tax deed forum and learn more.  Best of luck and take care.

Joe

Unable to work but Inherited 100k. What to do?

Most Popular Reply