I can borrow 100k private loan, what should I do with it?

Question

Hi,

Newbie seeking advice! I can’t get a bank loan (my income is too low and irregular), but I can borrow 100k from family, or sell a share worth 100k of my property overseas.

What can I do with 100k?

I hear about people buying properties for 80k, but having difficulty with where in the US would is a smart area to buy. If they are too cheap, doesn’t this attract low quality tenants? Scared to lose my nest egg.

I rent in New York now, and want to stay here for a few more years, so thinking of buying a rental property but not sure where

ideas appreciated!

Thank you!!

Benjamin Blei · Answer

Philly is tough and New Yorkers are getting their butts kicked. They don’t understand the market down here. It’s totally different. But there are a lot of opportunities.

Taylor L. · Answer

@Anna Kristensen passive income is a great goal. It's absolutely achievable in 10 years, but you can expect it to take a LOT of daily work, late nights, and full weekends.

My honest recommendation is that you read a few of the books they have on offer here at BiggerPockets, and others that you can pick up on Amazon. They'll introduce you to the possibilities and strategies out there. Once you know about the strategies you'll be able to pick one for yourself.

You'll need to learn how to analyze a market, analyze a deal, build a team, manage a team, and more. And that's all out there to be learned!

Additionally, you should make a point to go to at least one real estate networking event a month. Two if you can. The goal is to meet people who are having success and learn about what they've done.

The reason for these recommendations is: a lot can be done with $100k, but the money will only go as far as your mindset and education. A lot of what you need to learn at the beginning is available for free on podcasts and at meetups, or very cheap through books on BP and Amazon.

Good luck! Let us know how it goes. Watch out for shiny object syndrome.

Taylor L. · Answer

@Imran Suhail Ashraf nothing wrong at all with going after commercial properties, that's all I do! However to get a larger commercial property you'll need to be able to qualify for a loan. Given what the original poster has said, she likely can't qualify for the loan at this point. Additionally, the 100k she has access to would be in the form of a loan itself, not cash to put as a downpayment on a loan.

There's nothing wrong with house hacking a quad, either. OP is in NYC (sky high prices) and doesn't have much of her own capital for a downpayment, so it's unlikely that strategy is going to be applicable. I know folks who have seen a lot of success with short term rental arbitrage in NYC, that's probably a better strategy because it's less capital intensive.

Before diving headlong into either of those strategies, getting educated on the ins and outs is all I'm recommending.

Anna Kristensen · Answer

Cincinnati?  Growth seems good there, affordable and decent returns. The houses look manageable and have beautiful bones.

Simon Smith · Answer

@Anna Kristensen hey Anna I’m in NYC and pretty much have the same idea as you too!!!

Anna Kristensen · Answer

@Taylor L. Agreed! I’m going to hit the books. Thanks for your advice

Thought I should add that it could be possible to not borrow the 100k, rather sell a portion of my overseas property (Sydney Aus) to family for the value of 100k.

That property has appreciated enormously, but the rental return is lousy because I’m taxed crazily as a foreign resident

Imran Suhail Ashraf · Answer

@Taylor L. I'm new here and still learning but if you can get the $100k why not look for a commercial property that needs some work. You can use 50k as downpayment for it and finance the rest where the mortgage doesnt cost you more than 30% of the gross rental income after spending 20k on renovations and keep $30k for unforeseen expenses. Hard to find but it would be worth it if it yields $1500 to $2k cashflow after getting a cash-out refinance and largely paying back the 100k

Another option could be to house hack and buy a 4plex on an FHA loan that needs only 3% down in which case you can buy a nicer property, live rent free and a year later you can rehab+refinance

Jacob Sampson · Answer

Don't borrow $100k from family.

Anna Kristensen · Answer

@PJ M.

Thanks!

Yeah ok. I would probably need someone to help advise by the sounds of things then

PJ M. · Answer

Philly is very nuanced within neighborhoods.  There are a lot of areas where it can be block-to-block.  It's been that way forever.  I remember when I was young my grandmother "moving" to a better area.  She literally moved 5 blocks away from the home she sold.  She was right though.  She moved to a very nice area and I could spend 5 minutes walking to her old block to play with the friends I had there.

I can borrow 100k private loan, what should I do with it?

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