I have $200,000.00 cash to invest.

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I have $200,000.00 cash to invest.

Scott Champion
Rental Property Investor · Shelby, NC · Member since 2018 · 10 posts · 8 votes

I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Scott Champion:

I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?

Scott, you just set off about 1,000 keyword notifications from those on BP who will now private message you and post in this forum a slanted angle of where to invest on the hope and glimmer that you give them the money to invest in them. 

Truth be told, your question is to vague. There is no information at all about you. do you make $10M a year or $50k a year. Would that impact your investing strategy? Have you ever owned a home, a self storage facility, a MHP? Would that experience impact your decision?

Are you looking for income vs. equity?  Without someone knowing the ins and outs of this, the information you receive will be just someones opinion but probably provides no strategy or path on how you should invest the $
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?

    Scott, you just set off about 1,000 keyword notifications from those on BP who will now private message you and post in this forum a slanted angle of where to invest on the hope and glimmer that you give them the money to invest in them. 

    Truth be told, your question is to vague. There is no information at all about you. do you make $10M a year or $50k a year. Would that impact your investing strategy? Have you ever owned a home, a self storage facility, a MHP? Would that experience impact your decision?

    Are you looking for income vs. equity?  Without someone knowing the ins and outs of this, the information you receive will be just someones opinion but probably provides no strategy or path on how you should invest the $
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    10Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    2y
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?


     Personally I would invest in something relatively close to you, that you understand and have knowledge of.

    [email protected]512-888-9122
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    4Reply
  • Dustin TuckerBusiness Member
    Lender · Savoy, TX · Member since 2020 · 195 posts · 80 votes
    2y

    @Scott Champion Since you have been investing since 2018, keep doing what you have been doing, if you dont have your real estate license get it, investing in yourself is a can't lose scenario. I think a bigger reset is coming in the coming 3-6 months, so i would be extra picky in my deal analysis. If you are looking at multi family investing check out lifestyles unlimited they have a great program

    [email protected]903-647-6036
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    0Reply
  • Jim PfeiferBusiness Member
    Investor · Dublin, OH · Member since 2014 · 241 posts · 495 votes
    2y

    As @Chris Seveney said, it would be helpful to have more information.  Personally, I would put most of it in passive real estate syndications - but I am a full time passive investor so that makes the most sense for me.

    The first decision you would need to make from my perspective is whether you want to invest passively or actively (your profile says rental property investor, so I would assume you are currently an active investor).  Many successful active investors transition to passive investing as a way to diversify into new asset classes or markets and to earn back some of their time and still benefit from the positives of real estate investing.

    To answer your question - I would allocate a portion of the $200,000 to MF as I believe this is a good time to invest in an asset class that has recently struggled.  I would also put part of it in a debt fund.  For the rest I would consider a triple net lease deal or fund in industrial or commercial real estate.  But again, as Chris said it is difficult to recommend something to you without knowing more information.  My allocation I mentioned above is purely what I would do based on my current financial situation.  

    Good luck!

    2Reply
  • Gino BarbaroPro Member
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Scott Champion

    I would ask what niche of real estate do you like? And what are your goals with investing? Monthly cash flow, retirement, leaving your job. That will make a big difference as to where to invest.

    You live in a really good market, so you can invest in your backyard

    Gino

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    3Reply
  • Scott Champion
    OP
    Rental Property Investor · Shelby, NC · Member since 2018 · 10 posts · 8 votes
    2y

    @Chris Seveney sorry I'm a little ignorant in the investment world. I purchased my first and only rental house back in 2018. It was a small two bedroom house that I completely remodeled myself and it has done well. My wife and I make about 175k a year. I'm recently retired after a 30 year career in law enforcement. I was really leaning toward a short term rental (Beach House) but can't make the numbers make sense. I obviously have very little experience or knowledge in real estate investments but hopefully can make some good decisions for me and my family.

    2Reply
  • Deb S.
    Investor · Punta Gorda, FL · Member since 2010 · 154 posts · 128 votes
    2y

    Hi Scott, are you looking to be a passive or hands-on real estate investor? Since you are retired, you want to preserve that $200k and make it grow I assume?

    I've been doing Private Money Lending/Partnering since 2021 which is very passive for example. If I wanted to be more involved I may have considered starting a real estate biz like wholesaling, flipping, property management, etc.

    So, I would first determine how much time you want to 'invest' along side that $200k. Then you will have some kind of direction to follow and can narrow it down from there.

    Hope this helps a bit. 

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?


    Buy rentals with 10% or better net income, refi then buy more, rinse and repeat 

    4Reply
  • Jonathan Bock
    Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
    2y

    @Scott Champion

    Does your pension provide enough for your lifestyle ?

    Your situation is different than the majority of people on the boards and the general population; you have a paycheck for life.  This is an edge that you earned.  

    Most people have to determine how to distribute income effectively from the assets they have gathered.   

    What's your purpose for these discretionary funds?  

    1Reply
  • Samuel DioufBusiness Member
    Real Estate Agent · Columbus & Cleveland, OH · Member since 2023 · 1k+ posts · 1k+ votes
    2y

    I'd say house-hacking is one of the best ways to get your foot in the door of real estate investing. You’re able to learn the basics of a real estate investment with lower risk and build equity at the same time. Being able to enter a property with only 5% down means you can leverage your money way more effectively as well. When you leverage money personally, I think it makes more sense to invest in appreciating markets

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    0Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    2y

    You guys make great money and have a good base. I would look into multi family or doing BRRR's. Either being active investing or putting it into a fund. Personally I would buy houses cash, rehab then refi. You can use financing too but if you want to keep it simple paying cash is fine. In my area the 200K can go a long ways. Not sure in your area but 200K should be enough to get the ball rolling.

    1Reply
  • Scott Champion
    OP
    Rental Property Investor · Shelby, NC · Member since 2018 · 10 posts · 8 votes
    2y

    @Jonathan Bock yes my pension is $430 more a month than a made while working. My wife also makes good money so financially we are doing really well.

    I currently work with a local hospital police in an "as needed position". I typically work a day or two a week. I'm open to passive income ideas but I'm also ok with putting some sweat equity into some projects as well!

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Scott Champion

    Hi.  I guess it's a testimony to BP that you're asking a bunch of strangers what to do with $200K.  Like @Chris Seveney said we don't know a lot about you.

    The market is tough right now.  So... it depends on your goals and your time horizon.  If you buy a regular deal with a regular down payment in a regular neighborhood, you'll probably lose money in the short term and be cash flow negative.  If you hold that deal for 25-50 years, you'll probably be OK.  Does that sound appealing?  Other strategies are higher risk, higher time consumption, and higher reward.

    I would definitely NOT recommend starting with flipping, wholesaling or lending.  Those are high risk, high reward strategies that presume experience and knowledge on your part.

    Hope this helps

    3Reply
  • John Mason
    Member since 2024 · 1k+ posts · 351 votes
    2y

    See if you can do meetups and meet experienced investors near your city and see if you can get onto  a Joint Venture to get feet wet

    3Reply
  • Jonathan Bock
    Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
    2y

    @Scott Champion

    Personally, I'd pickup the vacation house for lifestyle and legacy as well as a fun project to keep busy.     

    Chasing cashflow with rentals in retirement is more just buying yourself a job.  

    You have optionality which is amazing but it's tough to find focus before you have clarity.   

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    2y

    @Scott Champion

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

    If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?

    Similarly, if you put all Class D tenants in a Class A 4-plex, what do you think will happen?

    So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

    Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

    Class A Properties:
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% the more recent norm.
    Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.

    Class B Properties:
    Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
    Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years

    Class C Properties:
    Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
    Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
    Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

    Class D Properties:
    Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
    Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
    Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    The City of Detroit has 183 Neighborhoods we’ve analyzed.

    PM us if you’d like to discuss this logical approach in greater detail!

    [email protected]248-209-6824
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    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?


     If your credit is decent then I would utilize your cash as leverage to leverage:

    1. Get preapproved for a Hard Money Loan to fix and flip. Your cash would be used for downpayments, make payments and emergencies. or

    2. Get pre-approved for a buy and hold loan- It could be multifamily, single family.... depends on the market

    3. If you're accredited start researching potential syndicated deals- Some you can get in for as little as $50K; muitifamily, storage facilities, Residential Assisted Living.....  What's out there is pretty endless

    4. Consider becoming a lender or joining a group of lenders.


    You have a lot of research to do.  The strategy we used at thed beginning with that type of cash was to partner with others to fix and flip using private loans then taking thee profis to buy and hold.  Good luck

    312-681-7487
    1Reply
  • Ámlèh Quáwáin
    Investor · Golden Beach Florida · Member since 2024 · 89 posts · 10 votes
    1y
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?

    Purchase preforming notes capped at half your total deployable capital (150K)

    Then sale the future revenue of those notes through note exchanges, doing this will allow you to hedge the US real estate volatility while turning a profit from the market 
    0Reply
  • Shawncy Blake
    Member since 2024 · 2 posts · 0 votes
    1y

    i have a great property i could send you that i found has many great qualities its a cozy modern home with workshop and detached garage price is close to half a million but could very possible to change the sellers mind for your price range seeing as it needs renovations not many but still need them this property is in washington state but the area is good for selling seeing as a majority is rich and looking for nature vacation getaways right by a beutiful lake and mountain contact me if you would like to find out more i will have to note if you consider and take the property i do require a finders fee of a minimum of 500 depending on the deal 

    0Reply
  • Jeff Puciato
    Real Estate Agent · New Haven, CT · Member since 2022 · 25 posts · 10 votes
    1y
    Quote from @Chris Seveney:
    Quote from @Scott Champion:

    I have $200,000.00 cash to invest. Considering all the factors in today's real estate market, how would you guys recommend investing this money?

    Scott, you just set off about 1,000 keyword notifications from those on BP who will now private message you and post in this forum a slanted angle of where to invest on the hope and glimmer that you give them the money to invest in them. 

    Truth be told, your question is to vague. There is no information at all about you. do you make $10M a year or $50k a year. Would that impact your investing strategy? Have you ever owned a home, a self storage facility, a MHP? Would that experience impact your decision?

    Are you looking for income vs. equity?  Without someone knowing the ins and outs of this, the information you receive will be just someones opinion but probably provides no strategy or path on how you should invest the $

     I agree with Chris, need more info and beware of the people messaging you on the side. 

    Always get multiple opinions

    1Reply
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