What wiuld you do with 100K in Madison WI

9 Replies

What would you do if you had 100K cash? I’m trying to avoid out of state investing because I have property management and contracting experience, so I could cut some expenses on those fronts as long as I can travel there reasonably. I understand 100 can’t get you much in Madison but I would be willing to drive out of town to perform due diligence, maintenance and other operations. Just curious what this forum thinks since there aren’t many people in Madison talking about it.

Buy a plane ticket to another state! LOL!

I'd probably look for a larger commercial property, maybe a storage facility. But it all depends on your level of experience, your goals, and what's available in your market. Too many unknowns to really give you advice.

I'm an investor/agent in the Madison area, and while It can be a challenge to get the numbers to work around here, there's definitely cash flowing properties out there, especially off market. I'm under contract for a nice 4 unit in Verona that I found off market and the numbers work great. I've bought 3 properties in the last 14 months all doing well, so don't let people tell you there's no deals to be found. 

If this is your first rental property, I'd recommend looking for a 1-4 family just to keep it simple for your first one?  Maybe look in some of the suburban markets like Belleville, Mount Horeb, Sun Prairie, Deforest, etc. Belleville and Mount Horeb seem way closer to Madison than they used to since Hwy 151 was completed.

Earlier this year, supply was extremely limited and going for ridiculous prices. Supply has definitely improved in the last month and I'm seeing fewer competing offers on things so it seems to be calming a little bit.

Hope that helps,

Keith

@Seth Bennett Depends on what you like to hold. You could use that for one down payment on a really solid rental in a really solid area. Or you could use it as a down payment for a couple of houses in a smaller market outside of Dane County. Columbus or Lodi are two that come to mind. 

Also, depends if you want your capital to grow rather than put it to use immediately. You could start flipping or even do some hard money lending if you feel comfortable with that. 

If you want more ideas, we've got a local meetup group that gets together every other week. I'm sure everybody there would be happy to give you their two cents. 

@Seth Bennett BRRRR could certainly work in those areas. It's a good way to scale faster, but I'll caution on being too leveraged too. My first couple properties I did pull equity out to buy the next. However, I found myself in an uncomfortable position in 2008-2010 and watched a few highly leveraged friends loose it all. So, now when I improve a property I just leave the equity in it and take the increased cashflow. I am by no means saying don't BRRRR, as it helped get me started and I don't regret it one bit. I'm just saying use caution if you are going to try to be at maximum loan to value ratios on everything. Some would probably argue this point, but I take the more conservative path.

I agree with Keith, take the conservative path. Plus BRRRR equity is not what it used to be; I consider myself lucky if we finish with 10% equity after a full remodel, but it is more important to me to not touching the building again (capex) for at least 15-20 years.

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