What should I do with $100K cash?

[Account Closed]

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

[Tommy Ray]

I live in Texas.  I invest in TN, TX, OKla, FL, SC...  Oklahoma has the most potential.  Prosperity Bank serves both TX / OK.  They will lend on stock / ETFs / Mutual Funds.  Invest in a stock or fund with a huge upside on appreciation (think AI / Robotics).  Collateralize it for the down payment of a discounted buy in OK / TX.  Rock solid rental while the money is in the stocks doing double duty as the principle investment as well as your down payment equivalent.  Buy the rock solid rental and get your appreciation, cash flow, depreciation, principal pay down, equity capture on a discounted by and forced appreciation gain for a well targeted rehab.  

[Ko Kashiwagi]

Hi Danny,

Fellow Bruin here. Yes, it is possible and I work with many people doing out of state in OH. I know a few people doing deals whilst in college too. Are you looking to put someone else (partner/family) as co-signer on the financing side? If not, you'd want to make sure it's a beginner friendly program. You'd also want to have an investor-friendly agent/PM/boots on the ground as a lot of things can go wrong on the rehab especially if you are not visiting the site.

If you attend meetups in LA (check meetup.com), you'll definitely meet out of state investors,

[Remington Lyman]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

You will have time depending on what you are studying. That is more than enough to start real estate investing in Ohio. I recommend starting with a single-family C-class property. Should be under $150,000. I would try to self-manage it yourself. This will teach you a lot of skills and prepare you for more complex investing in the future

[Anthony L Amos Jr]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

 You can absolutely do deals in the Midwest while in College in LA! Educate yourself on remote investing and build out your local team of deal finders, lenders, contractors, and property managers. 

You can find BRRRR's in Columbus and Cleveland with up to 100k down payment on properties. Cleveland is more cashflow and Columbus offers more potential appreciation.

Facebook groups and joining the local REIA is a great place to start

[Travis Biziorek]

Hey Danny, I'm up on the Central Coast of CA and invest in Detroit.

$100k is enough to do BRRRR's in the Detroit market. I've been doing them there since 2019 and have 12-doors in the city.

I like that strategy because you could do 1-2/year and leave $5k - $10k in each deal. It's not going to retire you in 5 year but give it 10 - 15 and you're likely sitting pretty.

That said, it's not as easy to pull off as it sounds and not as smooth sailing as folks will make it out to be. I'm happy to connect, share some resources, and offer help where possible if Detroit is a market you're considering.

[Samuel Diouf]

Hey Danny, with you still being in college. I would start with something either turnkey or light value-add, so you can start forming your boots on the ground team with less pressure and risk. Once you feel you've built a strong team with your first property and have solid systems in place, I would then start buying more aggressively and taking on bigger projects.

I suggest reading this BP article on the core 4.

https://www.biggerpockets.com/blog/core-four-real-estate-team

That being said, Columbus and is a great market to invest in if you're looking for appreciation. The city is rowing so fast it's driving prices up. Cleveland is another solid rental market that cash-flow heavy. 

[Drew Sygit]

@Account Closed posters here are selling Ohio hard!

Detroit has more to offer though:)

Overall, your approach should be strategic and you should be targeting a specific Property Class (A, B, C, D).

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

PM us if you’d like to discuss this logical approach in greater detail

P.S. we've ranked all of Detroit's 183 Neighborhoods, so you can make more informed investment decisions. Ask those posters from Ohio if they can provide that level of info!

[Tanner Lewis]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

Hey Danny! I personally am a big fan of the Cleveland market. I have seen a lot of movement there on the lending side, and it has both good appreciation and cash flow. If you are looking to BRRRR, it may be tricky to do your first flip in an out-of-state market, especially if you are using hard money. I think the best thing to do to set you up to be eligible for financing across the board will be to buy a mostly turnkey deal, and then do a lipstick reno out of pocket, and then refinance. This will build a track record for hard money lenders and will also give you experience with remote flip management with lowered risk. 

[Engelo Rumora]

Quote from @Drew Sygit:

@Account Closed posters here are selling Ohio hard!

Detroit has more to offer though:)

Overall, your approach should be strategic and you should be targeting a specific Property Class (A, B, C, D).

If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:

Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

PM us if you’d like to discuss this logical approach in greater detail

P.S. we've ranked all of Detroit's 183 Neighborhoods, so you can make more informed investment decisions. Ask those posters from Ohio if they can provide that level of info!

What's wrong with hard mate?

Don't tell me your getting that old haha

[Jimmy Lieu]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

Hi Danny, yes that is totally doable! You just have to make sure you work with a realtor who can easily plug you in with his system and network of GCs, PMs, lenders, etc. so that you can easily build you real estate team out-of-state. The Columbus OH is on fire because of the great macroeconomics - job growth, population growth, and major companies developing here (Intel, FB, Amazon, Google, etc.). My clients from California are successfully buying BRRRR deals here - positive cashflow, meets the 1% rule, and has tons of appreciation. You can definitely find great deals at a very cheap price point - $120k-$180k. Happy to connect and answer any questions you may have.

[Becca F.]

Congratulations on having $100k saved and being able to save $4000 a month! You're way ahead of many college students. Would consider doing a house hack once you have a an accepted job offer and start working? Do you think you'll stay in the LA area? 

I agree with @Drew Sygit's comments about knowing what is Class A, B, C and D. I invest in the Bay Area and Indianapolis metro area. Most of my properties are Class A (Bay Area and Indianapolis suburb) and I bought Class C in 2023 to try to "cash flow". I've had constant repairs with Class C#1 and this was a house that went through an inspection and had some minor repairs and I'm losing $300 to $500 a month most months.I also had a new AC unit stolen right before the tenant moved in. BRRRR is challenging OOS and you need a trusted team.

I think the property manager is the one of the important parts of the Core 4 team. Two very honest PMs gave me assessments of my Class C properties. They told me to get a cage for the AC unit (no one mentioned that before) and what would be my likely ROI in the future (with projected appreciation, rent increases, capital expenses, etc). I disagree with buying Class C and to focus more on appreciation and look at Class A and B. I can tell you several stories of California investors who bought Class C and are losing money.

I recommend attending local meetups to network with other investors who buy locally as well as OOS. You can also look up Columbus or Cleveland investor groups on Facebook or Meet Up. And if you do decide to buy in Ohio, network with local investors (someone unbiased, not trying to sell you anything) and fly out there to get to know the area. 

[Jake Forehand]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

Hey Danny, Cleveland has lots of value add opportunities. Make sure you have a reliable GC in place prior to buying a deal. Especially since you are out of state. Good luck!

[Alan Asriants]

Hey Danny, you should really consider a househack first before you start investing in out of state RE. 

Learn the ropes, get yourself a roof over your head and take advantage of best rates and low downpayment. 

You will learn a lot and it will be easier to "look" for the next deal

[Ryan Arth]

Quote from @Jake Forehand:

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

Hey Danny, Cleveland has lots of value add opportunities. Make sure you have a reliable GC in place prior to buying a deal. Especially since you are out of state. Good luck!

 Exactly, the GC is hardest part to get right and is absolutely crucial from out of state.

[Patrick Bussler]

Quote from @Account Closed:

I live in Los Angeles and am new to real estate investing. I have about $100K saved up and am able to save $4k/month. My goal is to build a large enough portfolio to live off of (I'm still in college). I'm interested in BRRRR but not sure which market -- maybe Cleveland or Columbus? I've been reading a ton about real estate, and I'd be interested in becoming an investment-friendly real estate agent. Would it be possible to do deals in the Midwest while I'm still going to college in LA?

Please reach out if you have any real estate groups I can join!

Hey! Congrats on starting early with real estate investing! BRRRR is a great strategy, and the Midwest can be a good region to invest in. Research cities like Cleveland, Columbus, Indianapolis, or Kansas City, and consider getting licensed in the state where you want to invest. Build a local network and stay organized to do deals remotely. Check out BiggerPockets, local meetups, and Facebook groups for resources and networking. Keep learning and stay focused!

[Jake Andronico]

@Account Closed

Keep the savings rate up and house hack. You will be very wealthy if you continue what you're doing. 

If you hear "fast, easy, and requires no money" - don't be surprised if you lose a lot of money. 

It takes more work and longer than you'd like. But, if you're consistent, you will be very very wealthy. 

I've house hacked twice in Reno, NV and it's changed my life. Best of luck to you!!

[Najma Osman]

Hi @Account Closed, 

With $100K saved up and the ability to save $4K/month, you're in a great position to start building your portfolio! Both Cleveland and Columbus are great markets to BRRRR due to their affordability and strong rental demand. Cleveland often offers better cashflow while Columbus is one of the fastest growing cities in the US.

Investing in the Midwest while still in college in LA is definitely possible if you have the right team and strategy in place. You can use local real estate agents, property managers, and contractors to help you invest and manage remotely.

Feel free to reach out if you're looking to invest in Columbus! I would be happy to share some reliable contractors and property management companies for you to vet. 

[Jordan Tinning]

@Danny Chmaytelli out of state investing is hard AF, but no one tells you that going into it. Don’t do that while going to college. You may end up hating it. Buy a house hack, see if you like being a landlord then spread your wings to out of state when you aren’t working on your degree.

That’s my advice anyway, I’m relatively young and take a huge swing at two out of state properties that ended up working out but I wish I would have crawled before I walked if that makes sense. Lot of people are going to tell you go for it and build your team later but that’s a huge mistake.

For context, I’m a millennial, young dad, who works full time and I own over 7 figures of rental property in two different states, Idaho and Florida.

[Nicholas L.]

@Account Closed

I'd house hack locally.  100%.

And IF you are serious about OOS BRRRR in the Midwest - you're going to need to spend some time in person in your chosen market.

If you buy a random property that you haven't seen just because people you don't know tell you "it's a deal" - you will lose money.

[Bud Gaffney]

House hack!

[Francis Nasser]

Hi Danny, I would pay for education. Of course, do this if you consider yourself an action taker. Look for someone who is doing exactly what you want to do and pay for their education, implement their strategies exactly how their teaching them. That's what I would do if I had that money starting out. An important note is, make sure that whoever you end up learning from aligns with your core values. 

An interesting fact, I spend a lot of money on marketing and most of our motivated buyers are landlords that didn't figure out how to run a business prior to investing. I'm not saying it's impossible but you will definitely flatten your learning curve if you get educated.

Learn and implement.

Alex Hormozi talks about this, you should check him out.

Good luck to you! 

[Francis Nasser]

Quote from @Francis Nasser:

Hi Danny, I would pay for education. Of course, do this if you consider yourself an action taker. Look for someone who is doing exactly what you want to do and pay for their education, implement their strategies exactly how their teaching them. That's what I would do if I had that money starting out. An important note is, make sure that whoever you end up learning from aligns with your core values. 

An interesting fact, I spend a lot of money on marketing and most of our motivated buyers are landlords that didn't figure out how to run a business prior to investing. I'm not saying it's impossible but you will definitely flatten your learning curve if you get educated.

Learn and implement.

Alex Hormozi talks about this, you should check him out.

Good luck to you! 

 Most of our motivated SELLERS are landlords**

[Regina Blake]

Hi, yes you definitely be a real estate investor while you are in college just make sure you have a professional real estate team in place. Ohio is the place to be and people from all over is investing in Ohio's real estate market. You got this and congratulations on going to college and thinking about investing in real estate reach out if you have any questions. Best Wishes!

[Eric Bilderback]

House Hack all day long dude!

[Colby Fryar]

Absolutely, you can do this from anywhere.  You just need a good team in the market you are going after-  real estate agent, property manager and contractor.  This is how I got started in real estate, investing out of state in Alabama while holding down a full time job in AZ.