I inherited a property that is in the process of being sold. Once the deal closes at the end of the month I am looking at paying off all debt and have the opportunity to continue investing in real estate in the sum of about $500k. My wife and I have a couple of rental homes which cash flow nicely. One of them is paid off and the other has a balance of about $60k. Other than our rental homes we are total novices in terms of flipping, wholesaling ect. but have read a few books, watched some YouTube videos and read a lot on this site. I guess I’m just trying to figure out the best approach to grow a business that will allow me to retire in about 10 years. With our personal home (paid off) our two rentals (valued at about $350k for both) and this lump sump- we hope to cash in our chips and live overseas and I’m seeking strategies on the best route to do that. Would you buy a couple more rentals in cash and put 20% down on another and let the extra cash flow pay it off and then maybe get another in a few years? Is it smarter to buy a couple wholesale, flip and then rent? Is wholesaling where it’s at? There is a realtor that works with a contractor that I met recently that could help us potentially flip to sell? Where would you start to grow a business that you could liquidate in 10 years if you had $500k? Thanks for any input and advice!

@Adrienne Binder - Lend it at Hard money rates and let someone else deal with all the BS

@Paul Moore Thanks for your response! We have appointments with sponsors this week. :) If you know of reputable avenues with strong portfolios- we would appreciate you passing along the contact. Passive is definitely the way to go for us.

Invest in a debt REIT. 10.5% returns for 10 years, puts you at 1.4 million. You retire. Now your investment brings in $147,000 a year, completely passive income, you can live off of while you travel. Rentals are not passive income, Flips is a job. But if you feel like it, you can buy rentals and flips and get them 100% financed using your REIT investment as collateral. Buy as many as you can find or buy when you feel like it, your money will be working for you around the clock.

@Adrienne Binder, your priorities should be capital preservation first, returns second. With that in mind, there are investments out there that offer a LOT better "risk-adjusted returns" than flipping. By partnering with an expert operator, your cash can not only be preserved but have a more predictable outcome in 10 years for retirement. Multifamily syndications for example could potentially double your capital every five years while greatly reducing your downside risk and providing an abundance of diversification. In 10 years that original 500k could be worth 2MM+. From there, you can funnel that into a diversified multifamily deal that offers 10% COC paid monthly, or 200k/yr. The key is to vet the operators upfront and let the one(s) you pick do all the heavy lifting.Good luck!

How would you invest $500k to start flipping?

Frank Rodrigues

Investor · Kansas City, MO · Member since 2021 · 110 posts · 65 votes

5y

There's a lot to digest here. If your ultimate goal is to go overseas then I would say creating a powerful cashflow portfolio might be a really good option imo. Something that you can manage from afar and still reap the benefits. With that kind of money, I would consider commercial multi-units. I know a handful of investors who set themselves up for life while creating a legacy to pass on to their posterity that way. I hope that helps and best of luck and congrats! If you have questions about finding good commercial multi's PM me.

How would you invest $500k to start flipping?

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