Golden goose or impossible task: what to do with an inheritance.

[Dylan Mehsling]

Hello All, I am a total newbie to the real investing world. I’ve done some self education through Bigger Pockets, Meet Kevin, Dave Ramsey, and Rob Built. I’m also a masters nutrition student. Exciting but overwhelming at the moment. I am writing posting to see if I can get some responses from some knowledgeable real estate investors, possibly some experts. What follows is a possible scenario for my future inheritance of an estate plus some cash. I will also list my goals in real estate investing. 

Who hasn’t been impacted by the covid crisis? It’s still kind of scary out there. I knew before a global respiratory pandemic that my chronically sick father would have a health scare. He’s in his 70’s and has had chronic lung disease for 15 years. I’m overwhelmed in that area of my life but am currently letting my head take over my heart in realizing that there is little to no estate or inheritance planning for when my father passes. Here’s a profile of a possible inheritance. What would you do in my shoes? 

$50,000 life insurance policy. A home in Tulsa, OK valued at $175,000. An unknown amount of cash in a mutual fund (my dad has dementia). $0 in debt for my father. $27,000+ in the bank. 

My real estate goals: fix up my childhood home and start it as a rental property. Use those funds to pay for my living expenses while I get my masters, possibly a PhD. Start a short term rental business on Airbnb or Vrbo with $200,000 revenues (7-10 properties). Long term goal of $5million net worth through long-term and short-term rental properties generating income. 

Knowing your goals, what would you do if this situation was dropped in your lap? 

P.S. I am in a good place with my father’s coming passing and have sought grief counseling. 

[Alexander Hogarth]

@Dylan Mehsling 7 years ago, I used 100k to purchase one property all cash and rent it out - which was fine, but I didn’t know anything about real estate investing and didn’t understand I could have gotten so much more with the power of leverage.

Fast forward to last year, I sold said property and used the same 100k as down-payment on a commercial blanket loan and acquired 14 units in a better market.

I tripled my cash flow; from netting approximately 300-400 usd per month to 1000-1200 usd per month after all expenses were paid.

Hope this provides some inspiration - if maximizing cash flow is your goal, so you can pay all living expenses etc from rental income, then smart leverage is your friend.