~500k liquid to invest, recommendations?

Question

Afternoon BP Members, long time lurker.

I am a recent college graduate in a fairly average job (~40k/yr) but due to an unusual circumstance have a relatively high amount of liquid capital. I have looked into several of the podcasts/forum posts on here and real estate investing seems a solid way to build wealth over time.

My question is what area would you tap into in a similar situation? I've considered private lending and also buy & hold, flipping seems to take too much insider knowledge and risk that I'm not comfortable getting into. I would prefer to leverage purchases but I'm worried that despite  liquid capital I will be rejected for having a thin credit file & only ~6 months of salaried work history. Would lowering LTV's or somehow escrowing PITIA help in getting mortgages approved? Or am I better off waiting and developing a longer credit & work history?

Sorry for the lengthy post, any response is appreciated.

Thanks, Greg.

Brandon Gentile · Answer

I would invest a couple thousand of that in to some serious real estate investing education - most of that being books and maybe a few seminars. Then stick to this site for some real good education and question answering. Like many members have already said, "be careful just spouting off." Every single member on this site would love to get their "hands on $500k liquid capital" if they could. The savvy investor is studied and knows who and what to do with it. Start small and work your way up.

Mark Freeman · Answer

@Gregory Van Heest  I recommend that you be careful about telling the world that you have $500k liquid to invest.  There are a lot of scammers out there!!  Having said that, $1/2 MIL is the minimum amount to get into my sindication. PM me if interested, JK!

Randy E. · Answer

I'm hesitant to give you advice and will leave that to investors with more experience in similar situations.

Congratulations on being in a position to invest so much money in your future and on being mature enough to make that decision.  Best of luck you you!

Jack Butala · Answer

@Gregory Van Heest, welcome to BP.  I was a lurker for quite some time, too.

Half a million is a pretty good position to be in.  I would study the heck out of the best residential real estate rental market in the county.  Buy two or three houses for cash with about $250K and get them rented so your cash return is as close to 10% as possible.

Take the other 250K and use it to aggressively buy and sell your favorite real estate product type.  Our's is cheap land.  When you have turned that 250K in $500K, pay cash for more houses to rent.  Then keep moving forward.

Everyone has a different approach.  We have always chosen to stay debt/mortgage free. It's slower growth but when all your friends are filing bankruptcy in about 12 years at the next cycle turn, you will weather the storm.

Devon Garbus · Answer

Greg- the 'education' from a real estate licensing course is almost worthless to an investor. The only thing a license does is teach you how not to get sued.

Devon Garbus · Answer

Do you want a job or do you want an investment?

If you want an investment get a reputable property manager to help you find a good MFU and just take the cash flow and smile.

If you want a job start researching your area to find fix and flips.

Can't give you better advice without meeting up with you and discussing your hopes and dreams

Gregory Van Heest · Answer

Thank you all for the responses - you're probably right stating that I have any amount of money was likely a poor idea, I was just trying to get a baseline idea but probably went over the top with disclosure. Is there anyway to have a mod hide this post/edit it?

Thanks again for all of your responses, I think the most prudent choice at this point is to simply educate myself thoroughly before starting anything involving real money; thanks for the suggestions I think I will look into getting an RE license as a starting point, as the education would prove beneficial at a fairly reasonable cost while allowing access to the MLS.

Jay Hinrichs · Answer

@Gregory Van Heest  first off don't advertise this on a site like this your going to get all sorts of PM's from who knows who.

second.. talk with experts in the industry... there are many options.

1. is to find a very good syndicator and do a few of their deals.

2. invest in quality reits so you have liquidity.

3. Multi family is good so are MHP

4. hook up with an Excellent HML who places funds for individuals you can make 9 to 12% pretty easy with no tenant issues.

get some education either free on line or pay for it but get quality education so you understand the in's and outs... most of the on line stuff and pod casts are just glossing over concepts many of which may or may not work in your market.

also get a RE licence this will give you basics and expose you to those in the industry.. especially the commercial space

Chadd Naugle · Answer

@Gregory Van Heest Forget the credit and work history...cash talks....and I would leverage it....Do some research on Investing in Apartment buildings...Lenders care more about the deal than you personally...They only want your work and credit history, because they want to make sure you don't need the cash flow to pay your bills., and that you pay your bills on time, if you don't have credit you can do a no doc loan, and still get funded. You have enough cash that someone would easily finance a commercial deal for you.

Let me know if I can help you more.

~500k liquid to invest, recommendations?

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