Just moved out of state and have 10 rental properties back in MI. Sold my primary residence and sitting on a large amount of cash. I am renting right now and won't be purchasing a primary residence for 2 years. What are your thoughts on places to make a good return on this money. Considering buying more rentals w cash and just cash out when I need the money. Concerned I may run into some unforeseen problem( banks are funny). Also thought about selling some puts on some somewhat conservative stocks. Looking for some good safe ideas. Please let me know your thoughts.

Do hard money loans .  

Curious about your reasons for delaying the purchase of a primary residence for two years?

There are many inexpensive, safe markets to consider, including Indianapolis and Dayton. I have a good experienced turnkey rental contact in Kansas City, and in San Antonio (my market), we have 10-15% cap houses for 60k or less, no maint needed. 

Originally posted by @Account Closed :

There are many inexpensive, safe markets to consider, including Indianapolis and Dayton. I have a good experienced turnkey rental contact in Kansas City, and in San Antonio (my market), we have 10-15% cap houses for 60k or less, no maint needed. 

 Loving the Dayton market.

Mini tech boom going on there.

Ohio, Michigan and Indiana have been my picks for a while now.

Spent 1+yr living in KC and just as I left the hedge funds moved in big along with St Louis.

Thanks Joe

glad dayton is working out for you! I don't have a contact there at present, may have something lined up there soon. 

If you need it in two years for a purchase, put it in the bank. If it is money you can afford to lose and do not need for a home purchase, you have many options. I wouldn't play with anything I needed for my own home's down payment.

@Mike Williams  

That's a good question you've posted. And a tough one to answer I think. I guess it depends on your attitude toward risk, and what a safe investment means for you.

Here are a few options I would consider:

1. Boring as it is, a CD is probably the most conservative way if you don't want much risk at all.

2. Put the money in a conservative mutual fund, shoot for 5% return.

3. Become a private lender to established rehabbers in your area. They should be able to cycle the money a few times in 2 years and you'll likely make a much better return. Of course you need to do your due diligence here. If you invest with a team with a solid track record you'll significantly reduce your risk.

4. Personally I like your own idea of buying more rentals and doing a cash out refi when you need the money. You said you already have 10 rentals. Perhaps those are all already financed and you're concerned about not being able to get loan number 11 with a conventional bank. You could look at refinancing some of your current rentals with a portfolio loan first.

5. Pay off one or more mortgages (if any) on your current rentals - this will increase the annual cash flow and generate a decent return on your money, and it should be easy enough to get the cash back out throughout a refi down the road. The risk here would be that interest rates rise significantly in the next two years and you're left with less appealing terms on the refi than any loan you have right now.

Would like to hear what you decide on this, keep us posted - I'm sure this is a fairly common problem people have.

Originally posted by @Chris Kennedy :

@Mike Williams 

That's a good question you've posted. And a tough one to answer I think. I guess it depends on your attitude toward risk, and what a safe investment means for you.

Here are a few options I would consider:

1. Boring as it is, a CD is probably the most conservative way if you don't want much risk at all.

2. Put the money in a conservative mutual fund, shoot for 5% return.

3. Become a private lender to established rehabbers in your area. They should be able to cycle the money a few times in 2 years and you'll likely make a much better return. Of course you need to do your due diligence here. If you invest with a team with a solid track record you'll significantly reduce your risk.

4. Personally I like your own idea of buying more rentals and doing a cash out refi when you need the money. You said you already have 10 rentals. Perhaps those are all already financed and you're concerned about not being able to get loan number 11 with a conventional bank. You could look at refinancing some of your current rentals with a portfolio loan first.

5. Pay off one or more mortgages (if any) on your current rentals - this will increase the annual cash flow and generate a decent return on your money, and it should be easy enough to get the cash back out throughout a refi down the road. The risk here would be that interest rates rise significantly in the next two years and you're left with less appealing terms on the refi than any loan you have right now.

Would like to hear what you decide on this, keep us posted - I'm sure this is a fairly common problem people have.

 Chris:

Thanks of the insight.  Most of my rentals are paid off (3 w/ loans).  I agree that the best idea seems to buy more rentals and cash out when needed.  My concern is that the banks may change their rules on me and I am holding the bag.  Personally, I can see the cash flow and am willing to take the chance.  The wife - on the other hand - doesn't like this scenario where all of our money is tied up - even if it is in a cash producing asset.  

I like the idea of hard money lending as I did it once before.  But, when it comes to purchasing my next primary residence, I don't want to be worrying about the actions of others.

I think I what I need to do is to sit down my wife and go over the projections and what that will mean to us in two years - even if I can't pull money out for some reason.  I should have the 20% to purchase/build my home.

I think I will park it somewhere safe until I am ready to make some offers.  Thanks again!

MW

Awesome, good luck!