Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
11y
I would use leverage and buy cash flowing real estate, apply all of the cash flow to the principle and pay the mortgages down in 10 to 15 years, then pull cash out and repeat. I agree with @Jeb Brilliant Indianapolis and Kansas City are great markets to use this strategy. In 15 to 20 years, you can be sitting on 20 properties free and clear and never have to worry about retirement.
Investor · Honolulu, HI · Member since 2013 · 3k+ posts · 1k+ votes
11y
With that amount you would be able to invest in the higher cash flow, high appreciation, low expenses and low vacancy areas like the California coast or even Honolulu.
Specialist · chicago, IL · Member since 2014 · 10 posts · 1 vote
11y
I would probably begin looking for my dream investment situation: find a 150 unit complex out in Indianapolis that netted me $200 a door after expenses + mortgage etc.
Even with that kind of money, I'd still need to find a great deal to make it happen, but that'd most likely be my game plan.
Otherwise, I may begin doing some private lending.
I would use leverage and buy cash flowing real estate, apply all of the cash flow to the principle and pay the mortgages down in 10 to 15 years, then pull cash out and repeat. I agree with @Jeb Brilliant Indianapolis and Kansas City are great markets to use this strategy. In 15 to 20 years, you can be sitting on 20 properties free and clear and never have to worry about retirement.
Its funny. I am in this exact position 2 months but with a larger amount after selling my company. My job gives me great flexibility and income that puts me in the top 1%. I could easily just keep working for 15 more years and have enough to retire on. But I decided to jump into real estate and should be closing on a million dollar property this week.
I am using leverage and the rental should easily pay for all of the costs and leave me with a good amount of money left over. I plan on paying down the principal, hopefully sell a few of the properties in 5 yrs. If I have gains/equity, I will do a 1031 and pick up a bunch of more properties.
My goal is 30+ renters in 10 yrs and retire right at 50.
Littleton, CO · Member since 2014 · 195 posts · 72 votes
11y
@Daniel Levine How much risk and hands on do you want to be?
@Anson Young does a meetup in the Denver area. It would be a good place to "pick the brains" of some Colorado Investors. Here is his post for the April 27th one:
There are plenty of turnkey RE investments out there but if I was in your shoes, I would want to be hands on and do some, if not all, of the rehab myself so I could handle those phone calls from your renters if you decide to be a Landlord.
Multifamily might be an option for you and might be a good one since the rents in the Denver area keep going up and up.
How long have you been in the Conifer area? I grew up in the Littleton area, and would love to have some property in the Mountains of Colorado.
One strategy that hasn't been mentioned yet it to take a portion [or all] and be a private/hard money lender.
These lenders usually get 3-5 points for a six month loan PLUS 12%-15% APR monthly income. Not bad for being hands off and short term.
I know Denver is on the higher side of the price range right now, you can always look 1-2 hours away from there and I'm sure you can find some lower cost SFH homes to get some experience with before jumping into a big project.
IF, you do decide to buy in the Midwest [Indianapolis is great BTW] - I would NOT buy small multi unit [duplexes and 2-4 unit]. They just don't work very well here - I learned the hard way.
Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
11y
Originally posted by @Account Closed:
With that amount you would be able to invest in the higher cash flow, high appreciation, low expenses and low vacancy areas like the California coast or even Honolulu.
I don't know about Honolulu, but $180,000 doesn't get much in "California coast"
I used to live in Orange County California (Tustin) and $180,000 will get you a down payment and a cash flow of NEGATIVE $1500-2000 a month.
I now live in Michigan where $180,000 could get you $20,000 cash flow per month!
With that amount you would be able to invest in the higher cash flow, high appreciation, low expenses and low vacancy areas like the California coast or even Honolulu.
I don't know about Honolulu, but $180,000 doesn't get much in "California coast"
I used to live in Orange County California (Tustin) and $180,000 will get you a down payment and a cash flow of NEGATIVE $1500-2000 a month.
I now live in Michigan where $180,000 could get you $20,000 cash flow per month!
I'd rather have the no muss/no fuss higher profit in Honolulu or CA vs fighting for a possible highly taxed and quickly cap exed cash faux.
Geez, everyone must be real estate millionaires in Michigan.
Residential Real Estate Agent · Hattiesburg, MS · Member since 2011 · 475 posts · 141 votes
11y
I'd spend a year getting to know the ins and outs of your local real estate market. If the prices are too inflated in your market consider venturing out 1-2 hrs to smaller markets.
I would probably do a few all cash flips. Best case your grow your nest egg considerably. Absolute worst case you lose alittle and learn a whole lot about rehabbing, marketing, and your local re market.
At this point you are pretty educated and ready to start buying distressed properties to rehab and rent.
Pay cash, rehab, rent, refinance, and eventually retire.
It's a fun game that's full of reward and risk like everything in life. Best of luck!
$180,000 investment and 20,000 per month cash flow… Sign me up!
Did I miss something in this conversation?
That's a pipe dream. See the various threads/blog posts on here on sub-$800/month rental income - specifically how they virtually cannot cash flow in the long term with few rare exceptions.
Minneapolis, MN · Member since 2014 · 332 posts · 288 votes
11y
@Account Closed
Indy multifamily over 150 units will typically not return $200/unit. The market is a slower growing one and often sees a lot of competition from new construction. I've looked at almost every decently located 150 unit + deal that's come out of Indy since 2011 and haven't seen any that cashflow $200/unit.
Columbus, Louisville, Lexington, Nashville, etc are all better bets.
I would use $150,000 to buy an REO property in Colorado and put $30,000 aside for the rehab. Hopefully you'd find something that can resell for $220,000+ once all the rehab is complete, and just keep chugging along making money that way.
"Could you go into a bit more detail as to why small multis don't work in Indy? Or perhaps a post detailing your experience?"
For the most part they are about 100 years old, located in bad or rough neighborhoods, very difficult to keep both sides occupied at the same time and don't come anywhere near the return they show on paper.
There are several other threads about this topic - just do a word search or give me a call.
$180,000 investment and 20,000 per month cash flow… Sign me up!
Did I miss something in this conversation?
That's a pipe dream. See the various threads/blog posts on here on sub-$800/month rental income - specifically how they virtually cannot cash flow in the long term with few rare exceptions.
I see you've read some of my posts, Andrey :)
Let's set aside what I'd do, and mention what I wouldn't do - I would not ask this question on BiggerPockets forums. Why - simple:
Tomorrow, you email will be flooded by every type of borrower under the sun. They will want to borrow, and they will have the greatest deals under the sun - each and every one of them. Have fun with that :)
Rental Property Investor · Scottsdale, AZ · Member since 2010 · 390 posts · 599 votes
11y
$180k hmmm ... I'd buy a Tesla Model S 85D, a big bag of medicinal marijuana and flood Ben Leybovich email with great deals for him to lend on for me. Why use the cash to invest when you can do 100% financing:)
Real Estate Investor · Middle TN and Southern KY · Member since 2014 · 71 posts · 26 votes
11y
Originally posted by @Richard Dunlop:
Please explain how that example would work? I'm from the south, and a former flipper, sold on lease purchases too. Notice I said "former" as the flipping market in middle TN and Southern KY is non existant. A local wholesaler sent out a picture of a desert the other day on a email blast saying this is the current condition of the Nashville market and he isn't joking. Oh you've got the TV wanna be graduates that pay 80%-90% of ARV before one dime of rehab and that simply does NOT work. So it's over with here.
Anyway would love to be educated on your example Richard. I've got to do something different. Thanks.
Please explain how that example would work? I'm from the south, and a former flipper, sold on lease purchases too...
...Oh you've got the TV wanna be graduates that pay 80%-90% of ARV before one dime of rehab and that simply does NOT work. So it's over with here.
You can still buy houses in this area for 15% of ARV! Whatever type of investing you want to do there is a profit to be made. Metro Detroit has problems yes. Metro Detroit also has SFH's that would sell for $10,000,000.00 in today's down market.
The example I've posted on here is I bought a foreclosure house for $806 all in.
It had and still has an almost 4 year tenant that pays $650 a month and pays all her own utilities. I've owned it in my Roth 401k for 5 months and not yet spent $1 on repairs.
I've now twice provided proof of this house by PM but the scorners have not yet acknowledged it.
EDIT to add I tried to UNDERLINE BOLD AND Italicize the line above but since it still does not stand out enough I repeat it here "Metro Detroit has problems yes"