selling my house and want to invest

Member since 2022 · 2 posts · 2 votes

My wife and I are about to sell my house and get a good chunk of money over 400,000 any ideas on what I should do to invest in this?

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William F. Senkowsky

Member since 2022 · 25 posts · 21 votes

That’s a broad question and is going to be specific to you and what your long term goals are… Obviously real estate, but what property type are you interested in, single family-multi family? What strategies are you considering fix/flip, long term rental/ short term rental? What condition of home are you comfortable with? Cosmetic or major repair? With $400k cash there are a lot of possibilities… Personally I would buy as many properties as I could but I also do construction/design work so I am able to save money on contractor expenses.

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William F. Senkowsky
Member since 2022 · 25 posts · 21 votes
4y
That’s a broad question and is going to be specific to you and what your long term goals are… Obviously real estate, but what property type are you interested in, single family-multi family? What strategies are you considering fix/flip, long term rental/ short term rental? What condition of home are you comfortable with? Cosmetic or major repair? With $400k cash there are a lot of possibilities… Personally I would buy as many properties as I could but I also do construction/design work so I am able to save money on contractor expenses.
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Greg Bly
OP
Member since 2022 · 2 posts · 2 votes
4y
Thanks, William with the San Antonio Market being like it is. I'm open to any kind of options at this time when you say buy as many houses as possible how would you go about doing that with the amount of money that I have?
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Aaron Bihl
Investor · San Antonio, TX · Member since 2017 · 344 posts · 268 votes
4y
The question is super broad and I think it depends on what you want to do and what your plans are. If you want to be hands off I think being a private lender or investing in a syndication would be great. If you want to be more actively involved I think it's a matter of figuring out a strategy and asset class that you want to focus on.

This is my blanket answer for pretty much every question but I think learning to find your own deals (in whatever asset class you choose) is a super valuable.
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William F. Senkowsky
Member since 2022 · 25 posts · 21 votes
4y
I would seek out off market deals by driving for dollars. Make connections with local investors who would be willing to match cash or get into multi family. More doors per location. I know San Antonio market is hot right now but there are other parts of the country like California that are through the roof and have more hurdles than Texas but people are still finding ways to invest and create opportunities. If your not savvy on the construction process or know what poses great issue it would be better to purchase something small that can cash flow to traveling nurses or military until you can network and gain education. I wouldn’t put all the money in one deal. That seems to risky without having a team of people who have some experience in investing. My opinion and I speak from construction experience. I’m not afraid of taking on a torn up house because I can do about everything minus special trades i.e major plumbing, electrical, HVAC. Yes it might take a little longer but I save a lot of money on labor cost.
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Roschelle McCoy
Investor · Washington, IL · Member since 2017 · 51 posts · 21 votes
4y
Lots of good advice here and I agree it completely depends on what your goals are and how you want to spend your time. Active investing requires a lot of time and education, some of which can be learned 'on the job' but you want to make sure you have a good knowledge base before getting started. Passive investing/private lending also requires a certain level of knowledge, but it's more about knowing and trusting the people that you're working with (i.e. lending to) rather than being an expert in a particular market, asset class, handy with doing repairs, etc.
If you're unsure, try a little of each. You have a good amount of capital to invest and you should diversify that into multiple investments and can do some active and some passive investing to see which suits your goals better.
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Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
@Greg Bly Did you sell it yet?... Some good advice in here already but consider this. Once you sell it you're literally jumping into the battle. Assuming you tick all the lending requirements supply is still extremely low and prices sky high. Based on the responses thus far I'd focus on your strategy, market research, running numbers, and what you're willing to sacrifice. There will be sacrifices if you want to buy cash-flow, house hack, live-in flip, etc.

Without a plan or DEAL in the works it's going to hard to find a new house. My friend sold his home last year because he wanted to build new. His family already has farmland for him! Not realizing the cost of construction and how high material prices could go he has been renting for last 8 months. He can't afford to build a home even comparable to the property they sold. Reach out to some builders if you don't believe me. I'm in central Indiana and builders are doing 1900sqft., $500K homes. That's easily 2x what it was pre pandemic.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
What are your goals, and how hands on do you want to be? You could passive invest in multiple turnkey properties or start a flipping campaign
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Zachary Inman
Specialist · Indianapolis, IN · Member since 2021 · 312 posts · 282 votes
4y
As with what everyone else has said, it really depends on your goals. Do you want to build an actively managed real estate portfolio? Do you want to be completely passive? Somewhere in between?
Also, risk tolerance is a big factor here. If you're looking for 10% IRR that would have different options than if you were targeting 30% IRR.
I work with a Midwest syndicator and have my own deals, so I can tell you first-hand that passive v active investing are very different.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
4y
A lot easier to sell than buy.

I'd get comfortable working knowledge of how to househack a plex or MIL and get that under contract before I sell. You may be living in a rental or motel otherwise.

Can you qualify for a new mortgage before you sell?
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Brock Mogensen
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
4y
Start with the end in mind. Are you looking to build a truly passive real estate portfolio? Or do you want to be more active? If passive, investing in syndications as an LP can be a great route. If active, putting that towards one apartment building with a solid PM in place is a way to go.
1 Reply
Seth Young
Specialist · Southlake, TX · Member since 2021 · 213 posts · 157 votes
4y
@Greg Bly Are you looking to be more active or passive in the investment process?
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Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
4y
Impossible to answer that without knowing your skills and goals. First, decide what investing looks like to you. Is it passive or active? Cash flow or appreciation? Whats your risk tolerance? What excites you? Then get educated and when you're ready take action.
If you want to be passive, then invest in a syndication. We offer them, along with many others on BP and elsewhere. If you want to be active, then pick your ideal strategy and go after it.
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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
4y
Whatever you decide to do with it, be sure to 1031 Exchange it so you don't get taxed on all of that capital gain!
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Chris Levarek
Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
4y
@Greg Bly "Search your feelings..." - Yoda
No but really, noone on here will give you the best option without knowing what your goals are. Only you can determine that.
I suggest listening to 50 BP podcasts that catch your eye. Then selecting the top 3 strategies that are of interest. Then posting this same question on those top 3 strategies.
This will get you on the path far quicker.
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
4y
@Greg Bly

@Ali Boone is right that 1031 exchanges make it possible to defer all tax on the sale of a property. A 1031 exchange can only be used for investment real estate. If you have lived in this property for 2 out of the last 5 years then you would qualify for the Sec 121 primary residence exemption. As a married couple you would be able to take out the first 500k of profit tax free, which would cover your entire sale!
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Troy Green
Investor · Austin, TX · Member since 2022 · 16 posts · 12 votes
4y
What @Dave Foster said is correct, if this is your primary residence and your gains are <500k per married couple you wont need to worry about short term gains tax. There are many good points that were brought up in this topic, you really need to find out what it is you want to focus in on (multi family, residential, or commercial). Make sure you do your research, as interest rates are rising you'll need to make sure that whatever choice you make produces a positive yield. Rentometer is a very helpful tool to determine local rental rates. I also recommend looking into a loan calculator so you can get a general idea of what your monthly payments will be on a financed investment property so you can make sure the deal makes sense.
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Cole Simpson
Rental Property Investor · Columbia, SC · Member since 2020 · 302 posts · 186 votes
4y
Right, What's your goal, cash on cash? Appreciation? What amount of risk are you comfortable with? Either way, If the numbers hit your goals I would do it. Best of luck!

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Anthony Engel
Investor · Philadelphia, PA · Member since 2021 · 11 posts · 5 votes
4y
@Greg Bly Congrats! My wife and I are in the same boat and closing next month. After a year of RE books, BP podcasts, and discussions with family and peers, we're going to rent for at least one year while we reset. Good luck to you both.
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