Putting Money to Work

[Josh Rich]

Hey BP experts, here's a question for the those of you involved in notes (NPN and Performing), apartments, SFR, and multi-family investments.

How would you invest $200-$250k in today's TX, TN, NC, and/or CA real estate markets? Assuming that you have some decent REI education, but no real experience.

No, this is not me; nor is it for an African Prince who needs your bank account number to liberate his cash ; )

Ready, set, go! (thanks in advance)

[Robert Leonard]

If you want to maximize your returns, I would use the cash buying advantage you have to buy off market undervalued properties that you find through your own marketing. Then cash out refinance, wash rinse and repeat as many times as you can while maintaining a cash reserve of about 10% of the amount you have to invest at all times for the unexpected. That will require a maximum amount of involvement until you develop processes and systems that allow you to replace yourself with someone else who does it "your way."

That's how you can "stretch" your investment dollars by buying undervalued (distressed) properties at deep discounts making your money when you buy! If you get all of your cash back and then some when you cash out, your ROI is infinite! I would do a deal or two with my own cash, then put together a bank book (as recommended by Chris I mentioned earlier) go to small bank commercial lenders once you have a track record of results until you find one or two who will offer terms that fit your long term strategies.

A kind of in between version of this strategy would be to find a wholesaler who is good at finding good off market deals and take a couple steps out of your acquisition process. This approach will save you the learning curve of marketing, negotiation, and getting this type of deal under contract. This approach will cost you the ability to get the properties at the absolute bottom dollar. It's give and take.