Hello, I'm very new to Bigger Pockets, but I've had this forum bookmarked forever until I really needed it. I sold one of my companies some time ago and now have a regular stream of ~1 million per month to invest. So far I'm a very aggressive entrepreneur, but I don't know the first thing about real estate, and that's where I want to divert a lot of my income to supplement my standard investment strategy of stocks, bonds, other companies, etc. I'm thinking maybe 10-30% of that into real estate to start. To be honest, I know absolutely nothing about real estate. So I have started in the Education section in the beginners guide. I was also considering buying the Bigger Pockets book on real estate investing. There's so many areas of interest though, that I'm wondering which area(s) one might suggest I focus on first, just so I'm on the right track from the beginning. From there I can study all day long until it starts to click. My ultimate goal is (fairly) hands off income @ ideally around 10% return. More would be incredible. I'm not sure if that's possible while using a management company to manage properties, so if that's not reasonable I'd love to know what is. I have no problem hustling and doing work, but I'm really trying to find something that doesn't require an immense amount of time per day/week. If that also isn't possible I'd love to know what is a more reasonable goal. In the back of my mind I think "what if I had 10 or 20 properties being managed by a company and I just collect income from them" type of deal. Obviously there's a lot more to it, but that's sort of the direction I was thinking. I don't know if wholesaling or flipping is a good strategy for me either (still reading about that, haven't gotten there yet). Any insight would be appreciated where to start. Thanks to you all. - U

Be prepared to get a lot of colleague requests and messages now that you announced you have $1M per month income and know nothing about real estate but want to invest. In the future you should never disclose on a public forum how much cash you have available. You will attract more of the wrong people than the right ones. Be very cautious of those who message you offering their services. With all that being said I’d suggest you keep your money safe and sound in a high yield savings account or something alike while you study various investment strategies and learn which is the one you want to pursue. As you gain more knowledge you’ll start to figure out exactly what direction to go. Welcome to BP and best of luck!

For STNL (single tenant net lease) where you are 100% passive and do nothing but get a check returns might look like this. Newly minted leases or close to newly minted leases for primary terms ( new construction NNN, sale leasebacks, ground leases, etc.) Dollar stores ( 2 million range and below) Cap rate - 6.25 to 7.25 ( varies by quality of construction, location, etc.) Usually you can buy in with 30% or more down. Value add ( not many years left on primary lease term) Usually bought all cash or with very little debt. 7.5 to 10 caps Banks - New primary leases most go up in price to about 6 million and maybe 5 to 6 cap rates. Value add - Leases fixing to expire could see up to 9 caps. If building is dark but still paying the rent sometimes 12 or 13 cap rates. Again lenders do not like these much so paying cash or low debt for LTV to curb risk in a lenders eyes on the loan. Pharmacies - CVS, Walgreens, Rite Aid - Usually flat rent in primary terms with most priced 3 to 8 million and a few up to 15 million. Cap rates usually 5 to 7 cap rates. Value add you could see 9 to 10 cap plus. Restaurants - national credit like Mcdonald's, Chick Fil A, Starbucks looking at mainly 4 to high 5 caps. Credit goes into franchisee or mom and pop users then cap rates rise about 100 to 200 basis points and rental increases are generally higher at 2 to 3% a year versus national at maybe 1% to 2% tops. Price 2,000,000 to about 5,000,000 Auto Stores ( Advance Auto, Oreilly's, NAPA, Pep Boys, Auto Zone,etc.) Newly minted leases 1.5 to 3 million in price. Cap rates - 5.50 to 6.75 Debt for STNL properties currently ranges from about 5.10 to 5.9 depending on credit and lease terms with LTV. Amortization payment schedules most are 15 to 25 years. If you want info on retail centers let me know. Most multifamily buildings are about 5 to 6 caps right now (some 4's) for quality even the big ones. If cap rater Is higher generally area is bad etc. and with the type of money you say you have the headache is not worth the risk. If you buy multifamily at a low cap rate then rent growth has to keep happening to blend the cap rate return upwards at a good clip over time. If property taxes rise, insurance rates go up, and rent flat lines or has very little growth then those properties can cost you money versus commercial NNN the rent increases are set and the tenants are paying the costs.

Be careful with multifamily right now. Everyone is saying it's the (Golden Goose) and have blinders on. You can easily lose your shirt quickly in multifamily. Lot's of syndicators are pushing it and taking investors money as fast as they can get it and making a quick sponsor fee on the way in. Some multifamily is doing well but there is a sense of confidence in the markets that nothing can go wrong therefore people are paying these crazy prices for the asset. I saw the carnage from the last downturn in 2007 and on. A key point you will need to decide is if you want to own 100% directly or invest passively? You might want to do a hybrid approach as well.

@Uzi Pablo You can start at https://grantcardone.com/. He is also on youtube, and every other social media outlet you can think of. He talks a lot about sales but also talks about real estate investing and investing in apartments. I think BP has articles about private money lending. You can look up mortgage brokers who lend private money because they are always looking for the investors that provide the funds. They have a fiduciary duty to make sure the property has equity so that if something goes wrong, they can foreclose on the property and get back all the funds plus fees for the investor. When I ask for funds on a house that needs work, the broker runs comps and looks at the contractors bids to make sure there is plenty of equity to protect their investor.

Best way to invest several million+?

Alina Trigub

Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes

7y

@Uzi Pablo

1) Congrats on building successful businesses! Would love to learn what these are if you don't mind sharing.

2) I wouldn't post any info on how much you have/make on a social media platform (f.e., BP) if you didn't want a publicity. So I'm guessing this was an intentional post on your side. If it weren't, then you can still take your post down (it's your post, so up to you what to do with it). Otherwise, yeah you know it - friend requests will be pouring in.

3) Do not invest in anything until you educate yourself on the strategy and understand the risks involved. Everything has the risks associated with it, even NNN leases.

4) Sounds like you're looking for passive investing options, which entails no control, but also very limited to no engagement on your part. If that's the case, the options would include but not be limited to:

a) Lending money (warning: don't go into a second position). This can be done either directly with flippers or through intermediary companies that connect flippers with lenders (for a fee of course, but they verify the info for you)

b) NNN leases @Joel Owens is your guy for it.

c) invest in syndications (btw, this does not entail multifamily only. it can be any asset class: MFH, SFH, storage, hotel, etc... The choice is yours as to what to invest in). If you need a way to find such investments or want more info, feel free to PM me.

d) invest in notes (performing or non-performing)

Again, education is the Key here. Read books and posts about these and other strategies on BP and outside of BP, pick one, and concentrate on it until you're comfortable to start investing. Only then take action.

Best of luck!

Best way to invest several million+?

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