what to do with $200k?

Tyler, Texas
Personal Finance
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what to do with $200k?

Matt Williams
Member since 2024 · 29 posts · 9 votes

received inheritance, and I have never seen this much cash before. I am seeking advice on how to deploy. I am (barely) considered an accredited investor, as I am asset rich, but have been cash poor until this point in my life. So, brief info to set the stage: I am 56, and own a small rv park, and several SFH/duplex that are debt free. A couple years ago I discovered the BRRR method, and have a duplex that is worth 265k, I owe 200k, paying 7.5% interest. Personal home, I am paying 6.5% interest and owe 270k. I have 20k in a Roth in stocks or funds, 12k in a traditional ira in stocks and an additional 6k in stocks. I have about 60k in real estate debt funds, and another 20k in a passive fund. I am leaning toward acquiring sfh at tax auctions, which requires cash on hand. Also, like to do more passive deals. For now, cash in high interest savings acct. What should be my next steps?

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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
8mo
Quote from @Matt Williams:

received inheritance, and I have never seen this much cash before. I am seeking advice on how to deploy. I am (barely) considered an accredited investor, as I am asset rich, but have been cash poor until this point in my life. So, brief info to set the stage: I am 56, and own a small rv park, and several SFH/duplex that are debt free. A couple years ago I discovered the BRRR method, and have a duplex that is worth 265k, I owe 200k, paying 7.5% interest. Personal home, I am paying 6.5% interest and owe 270k. I have 20k in a Roth in stocks or funds, 12k in a traditional ira in stocks and an additional 6k in stocks. I have about 60k in real estate debt funds, and another 20k in a passive fund. I am leaning toward acquiring sfh at tax auctions, which requires cash on hand. Also, like to do more passive deals. For now, cash in high interest savings acct. What should be my next steps?

Sounds like you know your way around investing well enough. I always buy BEFORE the auction because I get better deals that I can inspect before buying. Yeah, there is a trick to it but that trick doesn't require genius, just some training.
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  • Ken M.
    Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
    8mo
    Quote from @Matt Williams:

    received inheritance, and I have never seen this much cash before. I am seeking advice on how to deploy. I am (barely) considered an accredited investor, as I am asset rich, but have been cash poor until this point in my life. So, brief info to set the stage: I am 56, and own a small rv park, and several SFH/duplex that are debt free. A couple years ago I discovered the BRRR method, and have a duplex that is worth 265k, I owe 200k, paying 7.5% interest. Personal home, I am paying 6.5% interest and owe 270k. I have 20k in a Roth in stocks or funds, 12k in a traditional ira in stocks and an additional 6k in stocks. I have about 60k in real estate debt funds, and another 20k in a passive fund. I am leaning toward acquiring sfh at tax auctions, which requires cash on hand. Also, like to do more passive deals. For now, cash in high interest savings acct. What should be my next steps?

    Sounds like you know your way around investing well enough. I always buy BEFORE the auction because I get better deals that I can inspect before buying. Yeah, there is a trick to it but that trick doesn't require genius, just some training.
    1Reply
    • Matt Williams
      OP
      Member since 2024 · 29 posts · 9 votes
      8mo
      Quote from @Ken M.:
      Quote from @Matt Williams:

      received inheritance, and I have never seen this much cash before. I am seeking advice on how to deploy. I am (barely) considered an accredited investor, as I am asset rich, but have been cash poor until this point in my life. So, brief info to set the stage: I am 56, and own a small rv park, and several SFH/duplex that are debt free. A couple years ago I discovered the BRRR method, and have a duplex that is worth 265k, I owe 200k, paying 7.5% interest. Personal home, I am paying 6.5% interest and owe 270k. I have 20k in a Roth in stocks or funds, 12k in a traditional ira in stocks and an additional 6k in stocks. I have about 60k in real estate debt funds, and another 20k in a passive fund. I am leaning toward acquiring sfh at tax auctions, which requires cash on hand. Also, like to do more passive deals. For now, cash in high interest savings acct. What should be my next steps?

      Sounds like you know your way around investing well enough. I always buy BEFORE the auction because I get better deals that I can inspect before buying. Yeah, there is a trick to it but that trick doesn't require genius, just some training.

       Yes, I am trying to figure out how to get to them before the auction.  Any resources you recommend?

      0Reply
    • Ken M.
      Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
      8mo
      Quote from @Matt Williams:
      Quote from @Ken M.:
      Quote from @Matt Williams:

      received inheritance, and I have never seen this much cash before. I am seeking advice on how to deploy. I am (barely) considered an accredited investor, as I am asset rich, but have been cash poor until this point in my life. So, brief info to set the stage: I am 56, and own a small rv park, and several SFH/duplex that are debt free. A couple years ago I discovered the BRRR method, and have a duplex that is worth 265k, I owe 200k, paying 7.5% interest. Personal home, I am paying 6.5% interest and owe 270k. I have 20k in a Roth in stocks or funds, 12k in a traditional ira in stocks and an additional 6k in stocks. I have about 60k in real estate debt funds, and another 20k in a passive fund. I am leaning toward acquiring sfh at tax auctions, which requires cash on hand. Also, like to do more passive deals. For now, cash in high interest savings acct. What should be my next steps?

      Sounds like you know your way around investing well enough. I always buy BEFORE the auction because I get better deals that I can inspect before buying. Yeah, there is a trick to it but that trick doesn't require genius, just some training.

       Yes, I am trying to figure out how to get to them before the auction.  Any resources you recommend?

      There is a whole sequence that needs to be shown, to work properly. Bigger Pockets doesn't like those conversations to take place in the forums. They require those conversation be conducted by DM by clicking on the persons avatar name of the person you wan to speak with, then click on message and need to originate with the person asking the question. 
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  • Garret Rumbea
    Inland Empire, CA · Member since 2017 · 151 posts · 79 votes
    8mo

    Sorry for your loss Matt. Not advice but I’d personally put some toward higher interest debt, keep some liquid if tax auctions are your thing, and some into passive investments you understand. I’m biased toward larger multifamily syndications with experienced operators, strong track record, and investor aligned structures. To each their own.

    1Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    8mo

    With that 200k you should first consider whether you have any tax to pay on it. In Texas you don't, unless the money comes from certain other states. 

    Next, you should put that money in an interest-bearing account so that you have quick access to it when you need it. 

    You mentioned being an accredited investor. That's great, but be very careful when investing in deals requiring this. The expectation is that you have knowledge to do so. Make sure you do a lot of research before investing in one of these. They are higher risk than other types, but do have the possibility of higher rewards.

    1Reply
  • Alyssa MarquezBusiness Member
    Real Estate Agent · San Antonio TX / Fort Lauderdale, FL · Member since 2023 · 117 posts · 25 votes
    1mo

    As one of your properties is already paid off and not subject to a mortgage, I wouldn’t feel you would have any urgency to utilize the entire amount quickly. Your next step is to determine what portion you’d want to hold as liquid assets before weighing guaranteed returns on paying down your 7.5% duplex note against potentially higher expected returns on alternative investments.

    Given you are an established real estate owner and operator, it may make sense to invest in tax auction properties and certain value-add types of properties since that is in your comfort zone – however, it is imperative that you wait patiently for those deals to come to market rather than feel obligated to invest simply because you have cash. Additionally, consider making increased contributions to your retirement accounts over time in addition to the real estate to provide another area of diversification outside of. Using cash to continue buying opportunities in a HYSA for the time being will be a great option!

    1Reply
  • Matt Williams
    OP
    Member since 2024 · 29 posts · 9 votes
    1mo

    I paid off my personal house, took out a HELOC, and using that to fund purchases and rehabs. I am thrilled with this direction, as it takes the pressure of my house payment out of my life. I got a 6.5% instant return on my money. And no pressure to "invest" the cash on the sidelines, as I have no cash. Just a HELOC to use WHEN the deals show up.

    0Reply
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