Where to invest 100k?

[Arthur A.]

I have 100k to invest, and the following is how my money is currently invested:

• 25k in retirement plans (12.5k in low-fee mutual fund and 12.5k Roth IRA - blue-chip company)
• 25k in stocks - all blue-chip stocks that yield at least 3% dividend
• 50k in cash

As for my current situation, I am a 27 year old single male. I am currently living in a garden unit of a three-flat my parents own and pay $300 a month in rent and help out around the house. I have paid off all my schooling (undergrad and grad) and also have my CPA. My car is paid off and I have no credit card debt; my salary is at 80k, and will be increasing substantially in the next few years and will be at 6 figures within the next 5 years. I am taking advantage of 401k, the company matches 6%, and gives an additional 2% at the end of the year, so 14% of my salary annually goes into the plan.

The 100k I currently have will be growing quite a bit now that I have my car and grad school paid off, and I expect to save an additional 35k yearly on my current salary.

In terms of my outlook, I am looking to have my money grow, and since I am single, I'm not looking to invest in a single family home and put most of my time into maintaining it. My parents own a three-flat and I know how much work that takes, especially being a landlord and having to deal with tenants. I am just looking to diversify as most of my savings are in blue-chip stocks that have performed well, but I don't want this to be my entire portfolio. I haven't considered other investment options besides stocks and multi-family rentals, mainly because I'm not sure where I would even start looking.

Any advice would be greatly appreciated. Thanks!

[David Sanchez]

Hey @Arthur A. ,

Welcome to BP and for posting your first post! Not sure if you're brand new or have been lurking around for a while.

However, first off, you're in awesome shape for your age man, so congrats on that! As I began reading your thread I was thinking of ways to invest your money into real estate, whether it be SFH, MF, etc. Then I got the vibe that you didn't really care to do that based on the amount of work and you just wanted to diversify as you said.

That being said, if you are looking for a passive income with almost zero work, it seems to me you'd be best off working as a private lender or Hard Money Lender (HML). As your savings grow, it will be easier and easier for you to loan your money to other investor wishing to fix/flip or buy/hold/wholesale, etc. Depending on how you play your cards and how much cash you have to offer, I would imagine you'd be able to get at LEAST a 10% return per year if your money was always being used. Much more than your 3% on blue chips, but also a different scenario that requires it's own research and due diligence.

I'm somewhat confident you already knew this, but let us know if we can pinpoint something for you a bit more particular. Again, congrats on begin super-self-sufficient! Your rent rocks! Have you considered buying a place for yourself yet? Multiple benefits including tax write off, appreciation, etc. Says the guy to the CPA.... anyways, good luck, let us know what you're thinking!

-David

[Dave Savage]

I would consider keeping the $50k in stocks and mutual funds - you may want to check out the teachings of John Bogle.

The other $50k I would consider putting into a multi-family that you owner occupy. You can get a low down payment loan as an owner occupant and get the tenants to pay the mortgage. Rinse and repeat every 2 years(keeping the first property, and moving into a second one) and you could build a nice portfolio at low interest rates.

It would be good to experience the tenant headaches first hand, but you could even hire a property manager to manage the other tenants in your house to avoid that hassle.

[Ramon Jenkins]

I would agree: keep your $50k in stocks

Look into homepath, homestep, hud owner occupied properties.

Heck I wish we had more decent 3 plexes here locally

[Elizabeth Colegrove]

I would not touch anything but your cash. I would leave your employers match alone. We personally invest in single family. We manage them long distance and Working full time. We personally find that the tempermant of our tenants Are very much homeowner only investing. These houses also have the potential to appreciate higher.

To sum it up, we are in your situation. We are buy and hold single family investors. Currently investing in the Central Valley but have houses in 3 other states! Feel free to pm me

[Walt Payne]

@Arthur A. If you hire a good property management company it should not be any work for you beyond the standard due diligence. Especially if you went with a reputable turnkey and then just had that managed.

There are also syndicators who manage everything and send you your percentage of the profits. REITS also offer the same thing. Both have less profit than ownership because of the management and work involved at each stage, but the profits compare favorably to most stock investments.

[Matt Yates]

As far as your stock portfolio allocation, why do you not have more in mid cap and growth stocks as well as international ex-US? Your allocation seems more like a retiree and not someone with thirty years before retirement. Not a financial advisor, just curious.

[Luke M.]

I live in New York City, so it requires a ton of capital to get started out here. My situation is very similar to yours. I currently invest in out of state real estate and with 5 properties am able to to get a passive 18k annual (aside from actual acquisition and accounting). This doesn't include loan buy down and tax deductions. By utilizing property managers, it allowed for very little involvement after purchase and adding value (if needed). These are all single family, and if you could invest in your local market, this would be so much easier, but it is possible to do out of state as well.

[Rachel H.]

There's going to be a lot of advice here in response to your question which may take you in several directions. The important thing to figure out how much time you want to put into investing whether you want to be more active or passive. Usually, the more involved you are the higher the returns.

You'll have to figure out what will work for your overall goals. In any investing endeavor, I think it's best to start out with smaller deals than larger ones in order to test out the waters. That way, you can see what works and what does not work for you with less risk.

Hope that helps, good luck!

[Ali Boone]

The best thing to do is to keep researching around and scout out all of the opportunities out there. No need to rush into anything before what you know what you are looking at and interested in. There are tons of ways to start investing and you're starting so early, you definitely aren't in a rush. So snoop around, see what is out there and enjoy the ride! You'll find something you love and you will know it when you see it.

[Dawn Anastasi]

You will find that with the question "what should I do" you will get answers depending on the experience of the poster. If someone has experience in lending (or wants more private lenders) they will suggest lending.

If someone has experience flipping, they may say to flip houses or to lend your money to a flipper.

Buy and hold individuals may say to invest in buy and hold for passive income.

I would say that the one thing you should do above all else is RESEARCH.

You know where you are and you need to make sure you know where you want to be and how much you want to be hands-on. Read up on the Bigger Pockets Beginner's Guide. Talk with people. Go to a local REIA. Determine if real estate is right for you.