Lots of capital, no experience- how to start?

[Lauren C.]

My husband and I recently inherited a large sum of money and would like to begin our RE investing journey. I plan to pursue on a full-time basis. Currently in the midst of learning as much as humanly possible. We haven't quite got enough for accredited investor status, so syndications are (largely) out, though the short-term goal would to establish net worth at $1M (and maximize cash flow, naturally). I live in Manhattan, NY. 

To experienced investors: how would you get started if you had access to this capital? We can afford what newbies would normally consider A LOT of units, but I'm not about to, for example, make a down-payment on a 800K portfolio of multifamily homes in Rochester, NY and screw it up due to (inevitable) rookie mistakes. 

I would REALLY appreciate any ideas! $400K total out-of-pocket is possible at this point.

[Obi I.]

@Lauren C. Condolences on your loss and congrats for taking a good first step by reaching out on BP. Here are a few things to consider:

1. What's your long-term strategy? Do you want to stay in NYC? Or will you move in the future? This could be a factor for markets you choose to invest in. Your short-term strategy is cash flow, so looking for good cash flow markets will be key. 

2. Do you want to be an active investor and build up your portfolio deal by deal? Or do you want to be passive and partner up with experienced investors/operators?

3. Do you want to be a lender or an equity investor? Lending will cap your upside but your ability to be secured in the properties you're lending against provides some downside protection. Equity investing allows you to achieve unlimited upside but there are risks with every deal.

4. Do you want to buy and hold or do you want to flip? What type of properties are you most interested in - single/multi-family, mobile home parks, self storage, etc?

5. What kind of research have you done on markets, strategies? BP has a ton of books and podcasts that can help you out. Here are a few books to add to your list:

1. Multifamily Millions by Dave Lindahl
2. The ABCs of Real Estate Investing by Ken McElroy
3. The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges
4. Commercial Real Estate Investing by Dolf De Roos
5. Trump: The Best Real Estate Advice I Ever Received by Donald Trump
6. Tax Free Wealth by Tom Wheelwright
7. Commercial Real Estate 101: How Small Investors Can Get Started and Make It Big by David Lindahl
8. Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money by Matt Faircloth
9. The Definitive Guide to Apartment Marketing by Josh Grillo
10. Investing in Apartment Building by Matthew Martinez
11. Crushing It in Apartments and Commercial Real Estate by Brian H Murray
12. The 7 Secrets to Successful Apartment Leasing by Eric Cumley
13. 2 Years to a Million in Real Estate by Matthew Martinez
14. Burn Zones: Playing Life’s Bad Hands by Jorge Newbery
15. Commercial Mortgages 101: Everything You Need to Know to Create a Winning Loan Request by Michael Reinhard
16. It’s a Whole New Business!: The how-to book of syndicated investment real estate by Gene Trowbridge

6. With $400k, you could carve out some of your capital, build a team, pick a good cash flow market, do 1 or 2 smaller deals, get some experience and then start to scale as you get more comfortable.