$50k burning a hole in my pocket

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$50k burning a hole in my pocket

Jeremy D.
Member since 2019 · 66 posts · 32 votes

Newbie post.

Got $50k and trying to see what to do with it.  SO and I LOVE DC and our jobs are mostly located in the Bethesda area.  We are currently renting but want to start putting that money to work.   SO is not a fan of the house hack (privacy and safety concerns) and multis are hard to come by, so either seems like buying and holding or keep renting and use our money elsewhere.  Also, we both have excellent credit and have never owned a home.  I'm guessing cash flow is out with that scenario, so how else should I think about it as an investment if all I'm really relying on is appreciation and possibly fixing it up? I know the general thought is that appreciation should just be the icing and is a nice to have but shouldn't drive the decision. 

Questions:

Should we consider other strategies?

How can we make a good long term strategy with Buy and Hold? If we fix it up a bit, how do you model that into your projections for ROI?

TAGs: DMV, Virginia, NOVA, DC, Washington, DC, 

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y

Buy a house in a high demand location convenient to work. If it is high demand, both the price and the rent will rise over time. One of my first rentals in Rockville for instance was purchased for $270k and rented for $1900 in 2009. Today its worth $450k and rents for $3100. Rent growth is one of the most important and least talked about metrics on this site.

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  • Andrew McCartin
    Washington, DC · Member since 2019 · 23 posts · 12 votes
    6y

    @Russell Brazil The more ya know. Much appreciated 

    0Reply
  • Chris Davis
    Lender · Washington, DC · Member since 2020 · 8 posts · 9 votes
    6y

    Lots of smaller markets proximate to DC where $50k can get you into a multifamily deal if you syndicate out some equity. I have sponsors who have less than that in small ~$1m deals, wasn't that hard to find takers at least a few months ago. Obviously things are sort of in upheaval now. Look at Richmond, Baltimore, Staunton, Harrisonburg, Norfolk, etc.  If you're gunning for Fannie/Freddie Small Balance financing you'll want to live within 100 miles of the subject property and make sure your ownership group satisfies net worth and liquidity requirements, etc.

    2Reply
  • Jeremy D.
    OP
    Member since 2019 · 66 posts · 32 votes
    6y

    @Chris Davis interesting points I'm unfamiliar with.   DM'ing you to find out more.  

    0Reply
  • Shakti Ramdass
    Member since 2020 · 1 post · 0 votes
    6y

    Hi Everyone, new to BP here. So apologies if I'm mis-stepping on etiquette for this forum. If I should post as a new thread I'll gladly remove and repost. I'm also brand new to investing and in a similar position as the OP but with $70K and was looking at some of the new luxury condos in Tysons Corner / McLean. For those with experience in that area or in NOVA, what are your thoughts are on rentability and demand in that area?  Not really looking to cash flow as I figure I'd break even, maybe $100-$200 a month extra at best, so more looking at buy and hold before selling in a few years after appreciation.

    Any thoughts/advice welcomed.

    0Reply
  • Dave DeMarinis
    Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
    6y

    @Shakti Ramdass@Jeremy D. There are two groups I spent sometime with, both out of Richmond, VA who would be good connections on multifamily/syndication. They offer opportunity for investors with the financial commitment you are discussing and one even specializes in giving you an opportunity as an active investor in the project to get some experience. It is an interesting model. I haven't invested with either of them nor am I affiliated but I thought well of them and their characters. DM if you'd like a connection.

    I also invest and lend in Ohio as well as the Southeast. I'm partial to the Huntsville, AL market because of the strong population, job and income growth with excellent relative affordability. It offers a great mix of cash flow opportunity with appreciation because of the growth and affordability available. You need to make connections and learn the market but it is worthwhile.

    If interested in Huntsville, DM me and I can add you to some mailing lists for either rent ready homes or wholesale/value add/renovation opportunities.

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