What would you do with $160,000 to invest???

[Ryan Chenevert]

What would you do with $160,000 to invest???  Newbie wanting to get involved with real estate investing.  I'm in Baton Rouge Louisiana #rallypossum

[Robert Leonard]

I would not tell too many people, first.  Then go out and invest like you have no money and see what's possible.

You'll get a lot of suggestions, but it boils down to your level of risk tolerance and what your goal(s) are?  No matter what strategy you pursue, you should keep about 20% as a cash reserve.  And expect the unexpected!

[Alethea Bell]

I'm new to this but I agree with Robert

[Account Closed]

Ryan welcome to BP!!!!.... This site is great!!!

[Jay J.]

@Ryan Chenevert What are your goals..??  Where do you want to be in 5, 10, 25 years..

What is your risk tolerance? Is it just you, or do you have a family to add to this equation..?

Do you want to invest actively (flip / landlording) or passive (notes, HM loans)?

Give us some details and we (by we I mean myself & other more experienced ppl) can help!!

[Ryan Chenevert]

@Jay J. high risk- i'm young.  I'm open to both active and passive.  I'm a lawyer by day, so I'm looking for income mainly for "retirement."  

[Vernon Miller]

Try most of the time to make 10 % on your money in ample time frame.

$160000 could possibly buy 2 SFH 's and buying the right ones could pocket a investor $15000 to $30000 per home.

This all depends on location , available inventory, rehab to unit.

Welcome aboard!

[Brandon Johnson]

Loan it to me over and over again at 7% interest and sit back and collect dividends!

[Flavio Zanetti]

Or finance a 500K apartment complex with $100k down, save about 60k for the unexpected, and start collecting rents! 

As others have suggested, it will boil down to your risk tolerance...

Good luck on your next moves!

Flavio

[Zach Ward]

I to work full time as an RN and have the goal of using it as a retirement fund. That being said, Flips and Rehabbing can be a fulltime job because it's very time sensitive. My personal opinion, and that's all it is, I would spend some time looking and talking to other investors to learn how to analyze a property. Then when you have a decent property selected put about 20-30% down on it and see if you like being a landlord. I prefer lower middle class homes due to decent cash flow and less likely to have a whole lot of rift raft if you screen tenants properly (lot of info here to do that, simple check lists really). Plus with decent equity and a little cash sitting back, that's damn good insurance for any newbie mistakes. Cash flow and ROI are what I care about most. All about finding your niche and what your goals are. There is many ways to do this right.

[Tom V.]

I would leave that $160K right where it is and spend a few months educating yourself on the subject of real estate investing. Read books, this forum, the BP podcasts, and talk to people. Then you can make an educated decision on how that money should best be invested to meet your personal goals. Good luck!

[Zach Ward]

@Tom V. I agree... Educate yourself first. I saved my first DP over a year before I bought my first investment property. But whatever you do dont let analysis paralysis get you. Your first deal doesn't have to be "perfect".

[Rose Morris]

I also agree with Tom, you should study Real Estate carefully before you invest your savings. There are a lot of investors who went bankruptcy because they don't know what they are really doing.

[Alexander Lang]

Welcome to BP @Ryan Chenevert,

I think it boils down to what your comfortable handling while working your full-time career. Perhaps spreading out the $160k over a few SFH's would be ideal? Or perhaps cashing down one or two cash flowing SFH's would work for you to manage yourself? Or if you want to be hands off and hire a management company, maybe look for a duplex or small apartment? Definitely a lot of options so take your time and find a niche that you want to analyze. Also @Robert Leonard has a great point to remember to keep a nice reserve budget on whatever choice you pick as many new investors get in trouble by spending or borrowing to the gills then when the furnace or AC goes out they are putting their life savings or credit cards to work or worse.

[Kerry Baird]

If you are going with single family homes:

**You could make an all-cash on one house worth $160,000.  Rents between $1300-1500.

Quick close. No interest deduction. No debt pay-down.

**You could put 20% down on 4 houses...down payments of $40k each, of about $180-190k. Similar rents of $1500. Cash flow each of about $300, or $1200 total.  Interest deduction, and tenants' rents contribute to debt pay-down.  These features add to your returns.

**You could put 10% down on an owner-occupied house, and use the balance to improve the property, over time.  Live in the house for 2 years while improving the property.  Sell tax-free, with capital gains exclusion.  Move out, and do another in 2 years.  Move out, and do another in 2 years.  Tax benefits on interest paid.  No rents.  Capital Gains from equity build-up???