First RE investment

[Shawn Tang]

This question is to all seasoned investors. I live In Orange County, CA and have $80,000 to do my first RE investing.  I am open to all types of investing. What should I do? 

[Bill Manassero]

Hey @Shawn Tang!

Welcome to BP!  I am in Mission Viejo and would love to connect if you have the time.

I am primarily a buy 'n hold investor with properties in Memphis, Atlanta and Indianapolis.  Although I have purchased SFRs, I am now focused 100% on multifamily.

$80,000 won't do a lot in California but could do a lot in other states, where properties are much less, CAP rates are high and Cash-on-Cash returns significantly higher. In Indianapolis and Memphis, for example, it is very easy to find duplexes for $40-50K. With $80K, instead of buying two for cash, you could easily buy 8 duplexes for 20% down. That would give you 16 units/doors and, at say, conservatively, $100 per door net, that's $1,600 cash flow per month. That's a 24% cash-on-cash return. If you paid cash for 2 duplexes and the rent was $600 per unit, using the 50% rule, you could cash flow $1200 per month and later do a cash-out re-fi to purchase more properties. You have a number of different options.

Now, there may be some BPers that invest in California that might have a different suggestion for California investment options but that is my recommendation based on my experience.

Let me know if you want to grab a coffee sometime.  I'm always happy to meet and share what I know.

bill