What would you do in my shoes?

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What would you do in my shoes?

AP Horvath
Developer · Austin, TX · Member since 2020 · 82 posts · 61 votes

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.  

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Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
6y

@AP Horvath What would I do? Be careful of anyone sliding into your BP DMs with nefarious intentions now that everyone knows you have some coin. 

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  • Michael MagnoBusiness Member
    Real Estate Agent · Wadsworth, OH · Member since 2017 · 234 posts · 168 votes
    6y

    @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.

    3Reply
  • AP Horvath
    OP
    Developer · Austin, TX · Member since 2020 · 82 posts · 61 votes
    6y

    @Michael Magno, prob more on the appreciation side vs cash in my pocket. When you say a lot of damage -- what do you mean specifically?

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @AP Horvath Buy multifamily in Columbus, Ohio. I am trying to get a monopoly.

    If you want appreciation Columbus, Ohio is the market for you. https://fred.stlouisfed.org/series/ATNHPIUS18140Q

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    6Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y

    Find a commercial agent to help you and buy class B multi family. That has done well for me and many others 

    3Reply
  • NaDean Bowles
    Investor · Jacksonville, FL · Member since 2020 · 124 posts · 68 votes
    6y

    Leverage it as down payments for commercial property.

    7Reply
  • AP Horvath
    OP
    Developer · Austin, TX · Member since 2020 · 82 posts · 61 votes
    6y

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

    0Reply
  • AP Horvath
    OP
    Developer · Austin, TX · Member since 2020 · 82 posts · 61 votes
    6y

    @NaDean Bowles -- what kind? 

    0Reply
  • Laura George
    Investor · Pekin, IN · Member since 2017 · 47 posts · 27 votes
    6y

    @AP Horvath

    I love cash flow!!! To us equity is a bonus!!

    2Reply
  • NaDean Bowles
    Investor · Jacksonville, FL · Member since 2020 · 124 posts · 68 votes
    6y

    @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.  

    0Reply
  • Michael King
    Rental Property Investor · Navarre, FL · Member since 2019 · 913 posts · 640 votes
    6y

    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!

    2Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    6y
    Originally posted by @AP Horvath:

    Thanks @Mary M. --- 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.   

    3Reply
  • Steve K.
    Honolulu, HI · Member since 2017 · 247 posts · 315 votes
    6y

    invest in syndications...

    1Reply
  • NaDean Bowles
    Investor · Jacksonville, FL · Member since 2020 · 124 posts · 68 votes
    6y

    @ap 

    @AP Horvath You also have enough to do private lending.  

    4Reply
  • Jai Reddy
    Edmond, OK · Member since 2012 · 456 posts · 270 votes
    6y

    @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?

    4Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    6y

    @AP Horvath What would I do? Be careful of anyone sliding into your BP DMs with nefarious intentions now that everyone knows you have some coin. 

    18Reply
  • Matt Nusbaum
    Rental Property Investor · Annapolis, MD · Member since 2011 · 232 posts · 170 votes
    6y

    @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.

    1Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y

    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 .

    9Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y

    Buy them for 10-15k and sell at 35-45k on terms

    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    6y
    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? 

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    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y
    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 

    1Reply
  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    6y

    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.

    2Reply
  • Tom Ott
    Equity Raiser and Turnkey Provider · Cleveland, OH · Member since 2016 · 4k+ posts · 1k+ votes
    6y
    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. 

    0Reply
  • Blake Dailey
    Investor · Ogden, UT · Member since 2018 · 295 posts · 208 votes
    6y

    @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.

    1Reply
  • Manny Cirino
    Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes
    6y

    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.

    1Reply
  • Blair Boan
    Real Estate Agent · Greenville, SC · Member since 2016 · 24 posts · 14 votes
    6y

    A few I am assuming is three. If I had $300k, I would do what they call the BRRRR method on here. Buy a house cash, at a good deal. Rehab it and be all in at 70% after repair value. Throw in a good tenant or Airbnb it, wait your 6 month seasoning period (thats the case for me anyway) and then refinance it within the parameters that makes sense to you. I never use Airbnb rents to determine how much I refinance. I always use conservative 12 month lease rates. For instance, a 2/1 that I have on a 12 month lease rents at $1320/mo yet my 2/1 that is on Airbnb does a bit better at around $1800/mo on average. I will not base my refinance off $1800, I will base it off say, $1300. I just feel more comfortable with that. Personally I would pull out an amount where my mortgage would be roughly around $600-$800 which would leave me $700-$500 for Maintenance, Repairs, Vacancy, CapEx and cash flow.

    This method allows you to churn your money and get more bang for your buck.  

    Conversely you could buy 3 homes cash and cash flow fairly decent, yet your ROI will be very unappealing but that may not matter to you. Depends all on where you are in your career I suppose. For me, Im growing, so I need and want the best ROI I can get. Currently I am refinancing two properties that will essentially put me at an infinite return on both deals. Meaning I will have no money of my own tied up in the deals yet still get to keep the asset, with the cash flow, with the tax benefits and with the tenants paying down the loan.

    Lol, Or you could use the $300k as a down payment on a much bigger property and jump in the multi family space. I personally would do that at this point in my career, because Ive got all the SFR's cash flowing and pretty much cashed out ready to deploy on a bigger scale, but again, I just don't know where you are. Thats a big piece of it.

    But if we can assume you did happen upon $300k, you are sitting in a much better position that most starting out and thats for sure.  The biggest step is the fist one.  Jump in, make mistakes, learn.  Its the only way.  Good luck.

    5Reply
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