What would you do in my shoes?

122 Replies

If you had a few hundred thousand in cash, ready to invest in RE -- what would your RE investment strategy be?

Spread it around? land, multifamily, SFR, commercial or simply concentrate on one specific type of RE investment?

How much debt/leverage would you take on? And how would you prevent a downside scenario? 

Context: I am married. Zero debt other than personal residence. Married with 4 young kids. Make money in tech.  

@AP Horvath

Depends on the market you want to invest in, and what are goals? Appreciation? Cash Flow?

In my market (Cleveland Ohio), you could do a lot of damage with $200k cash plus taking on some leverage of non owner occupant financing.

It really boils down to what you want your $ to do for you.

@AP Horvath   Storage space (build it yourself), office building, or possibly apartment buildings.  

I also thought about note investing.  That's a big longer for your return but GREAT returns.  

As others have said, leverage. Use it to get loans to buy multifamily and repeat. At least that's what I would do. Good question @AP Horvath , as you have just put me in touch with my inner self. I've been pondering my next move, now I know what it is. 17 posts and you've solved a dilemma I was in! Thanks!

Originally posted by @AP Horvath :

Thanks @Mary Mitchell --- what did you like about that best? Why that vs commercial? 

Commercial is great until you have a vacancy. Then it can take years to fill it. Its just not as stable as MF.   

@AP Horvath

In order of my investing desire (cash flow first, then appreciation):

Class B Multifamily with a solid operation team.

Because I want to own the asset, otherwise I would invest with a proven Multifamily syndicate. With depreciation, I like tax free/deferred income.

Class B retail strip center, preferably a high-visibility hard corner. Business Tenants like visibility. With depreciation, I like tax free/deferred income.

Land in the path of development , preferably nice sized corner parcels at major intersections, one which has to be on the way of future commuters going to work.

Ocean facing property in either California or Florida, to short-term lease and then retire in and sell to other rich people from all over the world.

Now, tell us how you made money in tech? Stock grants?

@AP Horvath what are your end goals? This will help guide you with your strategy? Also, how much time do you have or are you willing to commit? What areas interests you? There a million ways to skin the cat with real estate investing. Personally, I would look at commercial investing. If you have the time (and desire) dive in and look for deals you can own yourself or partner with someone else who is experienced and can get you into larger deals. If you don’t have the time and desire then I would look to spread the money around into a few deals as a limited partner.

i would buy half a dozen houses free and clear then offer owner financing at 9.9% on them with A mortgage and collect checks without tenants toilets or trash to deal

With .

Originally posted by @Dennis M. :

i would buy half a dozen houses free and clear then offer owner financing at 9.9% on them with A mortgage and collect checks without tenants toilets or trash to deal

With .

Interesting, what's your experience in doing deals like this? 

Originally posted by @Robert Ellis :
Originally posted by @Dennis M.:

i would buy half a dozen houses free and clear then offer owner financing at 9.9% on them with A mortgage and collect checks without tenants toilets or trash to deal

With .

Interesting, what's your experience in doing deals like this? 

Very positive to say the least 

 

I'm biased since I buy and sell multi-family properties, but as long as you are fine with slightly lower cashflow in exchange for less headache and time spent focusing on the property (and with 4 kids, a wife and what sounds like a busy job), class B/+ apartments in path-of-progress areas in growing cities is one option.  You get the cashflow, depending on the city; you get the potential for timely appreciation, (but don't bet on it), and you get stable, able tenants paying market rent and generally leaving the units in decent shape.  

A few hundred thousand can get you around 20-30 decent doors in some solid markets and you'll need some reserves for emergencies unless you can save up a ton, quickly, to cover it (not recommended, though).  All under one roof, figuratively, and easier to manage so you can ask for some deep discounts from PM companies.

Originally posted by @AP Horvath :

If you had a few hundred thousand in cash, ready to invest in RE -- what would your RE investment strategy be?

Spread it around? land, multifamily, SFR, commercial or simply concentrate on one specific type of RE investment?

How much debt/leverage would you take on? And how would you prevent a downside scenario? 

Context: I am married. Zero debt other than personal residence. Married with 4 young kids. Make money in tech.  

 Multiple SFRs in the Cleveland suburbs where every property hits the 1% rule without trying. 

@AP Horvath I would buy as many cash flowing properties as I could by safely leveraging them 70-80%. I do a mix of short and long term rentals for a balance of increased cash flow and stability in an appreciating market.

I would also consider lending that money out for someone else to do the heavy lifting on solid deals and make a healthy return. Or partner up. You could learn the process while making profits.

If I had a few hundred thousand I would spread it out between a few NNN properties like Dollar General, CVS or Walgreens in hot markets like Orlando, Miami, Las Vegas, NYC etc... and a solid B class multifamily property with a proven track record or standing the test of time. That's a safer bet but you can always go the value add route if you want a long term growth.

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