$150k to invest: What would you do with it?

[Harry K.]

Hi everyone, been listening to the BP podcasts for a while now and finally decided to setup an account and start getting involved on the forums. 

A little about me: Just turned 31, live in Los Angeles working as a Director of commercial property management for a large international private real estate group that owns, manages, and develops commercial and residential real estate. I grew up working for my family’s business which comprised of roughly 50 rental units in the greater Los angles area that my grandfather started in the early 90s that my dad took over when my grandpa was ready to retire. It’s a mix of 4-16 unit multi family buildings and about 6 single family homes. We managed these ourselves everything from rehabbing and renting vacant units to all the accounting. So needless to say I know the multi family area quite well at least from a management perspective. Unfortunately, about 4 years ago, my dad and I couldn’t see eye to eye on a very fundamental aspect of life ( he didn’t like me dating a girl that was not of our ethnicity so he kicked me out of the house, told me I would never be able to make it out in the real world on my own without him, and i haven’t spoken to him since. I ended up marrying that girl earlier this year :) ) 

I grew up not really working any real jobs since all of my time spent was managing the family portfolio and the unspoken plan was always that I would eventually take over when my dad was ready to step aside. So when I got kicked out I had less than $3k to my name. Luckily, I was able to move in with my (at the time girlfriend’s) wife who was living with her grandparents since she had just moved to Los Angeles from a different state and was also in a transitional point in her life adjusting to the expensive LA world. We lived there for almost 1 year until both of us were able to fully support ourselves and go out on our own. Fast forward to today, and we are doing quite well for ourselves. We live in a great part of Los Angeles, where we are paying less than 15% of our take home pay on rent, and because of our low expenses compared to our income, we’ve been able to save $150k over the last couple of years without really live a frugal lifestyle. I’d like to use that money towards starting our own investment portfolio. 

I’ve been spending all my days the last few months on Redfin and LoopNet looking for the perfect property to jump into but seem to be stuck overanalyzing. I’ve given up on my local market of Los Angeles County since the numbers just don’t make sense and you’ll be lucky if you even find a property where the rents would cover just the mortgage payment much less mortgage plus expenses. So I’ve started looking out of state. Mainly looking at Detroit, Cleveland, Columbus, Pittsburg, Memphis, and some other cities in Texas, Idaho, and North Carolina. 

I wanted to hear from you guys and gals what you would use $150k towards with the end goal of being able to quit our traditional 9-5 jobs in the next 10 years and be full time real estate investors. Suggestions and markets to focus on and what types of properties to look at ( mobile homes/mobile home parks, multi family, single family etc) would be great. 

Anyone with experience on the Detroit, MI, Columbus and Cleveland, Oh, Memphis, TN and Pittsburg,PA areas that can share some recommendations would be much appreciated.