$350K in home equity credit....how would you invest it???

Question

So basically the title says it all. I have approx. $350,000 in home equity that I am looking to reinvest. I wanted to get suggestions from those of you with much more experience then I have. Right now, I have a rental single family home and the home I currently have.

I was looking to go in one of three direction (and completely open to other possibilities). And would like to go the buy, hold and rent route I think at this point opposed to the "flipping".

1) a multi-family unit. Currently looking at a 4 apt. building in that prince range

2) A Caribbean condo rental property.

3) Buying 2 or 3 condos locally.

Thanks for all your input and suggestions,

Rob

Jerry Padilla · Answer

@Rob  Estes

I would go the route of @Elizabeth  Colegrove

Reinvest the money with down payments for SFR or MFR up to four units. Conventional financing interest rates are so low. You can get up to ten conventional mortgages.

Davon Lowery · Answer

@robestes

That is a great problem to have. If it were me I would put half on a well performing multi-unit (no less than 5 units. At least 2 of the units being 3 bed 2 bath units) in an appreciating area.

With the other half I would partner with a hard money lender to fund deals to  break into the field.

Elizabeth Colegrove · Answer

Everyone has their own opinion and comfort. That being said, I personally would that 350k and invest them in single family homes with a mortgage. at 25% down or 50k I could get 7 houses. Than I would use that cash flow to continue buying until I had tapped out my conventional a mortgages. That being said, we are investing for long term cash flow and use our salaries to fun short term.

Jon Deavers · Answer

@Rob  Estes

Hey Rob. I think it's all going to depend on the market you're investing in or planning to invest in. If someone in your situation was looking in the Richmond area, I would recommend small to mid-size multi-family at this point. Properties are available here that cash flow well in the 1-4 unit size and there are a few larger multi's that would be great opportunities for cash-flow with that level of capital. I can set you up with a referral in MD or there's probably a bunch of good contacts here on BP.

Alternatively, you could look for a syndicated deal and really up the game with a large multifamily property. $350k could buy you a sizable stake in a partnership.

Good luck and congrats on the success so far!

Paul Pena · Answer

You may need to look outside MD for cash flowing deals.  With 350k, you can find cash flowing MF deals in Texas.  I wouldn't bother with SFHs.  I passively invest from California in Texas.  Our syndication now owns over 600 units.  You can do the same.

Scott Weaner · Answer

I would use my home equity to fund the down payments, trying to get 100% leverage on SFRs or small multifamily homes.

Mike T. · Answer

If you are buying a condo for cashflow make sure you look at the HOA monthly fees and the financial stability of the HOA. I just flipped a Condo and the HOA was a mess.

Rob Estes · Answer

Elizabeth and Devon, both great ways of investing. Elizabeth I love that angle. And Devon, I was thinking something very similar. Or at least have one of those multiple investment properties be a multi-unit property. I dont think over here in DC/Baltimore area I am going to find anything 5 units + with a 3/2 layout for under or even near 350K, unless its in a completely crappy part of town. I have found a few that are 2/1 or 2/2 in the seeking price range.

Rob Estes · Answer

Thanks so much for the advice Jon! I never really thought about a partnership stake in a large unit...now you have me thinking!  Maybe if you have some contacts up this way that are in that type of investing, just shoot them over. Thanks again!

$350K in home equity credit....how would you invest it???

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