How would you invest $250K starting out?

Question

My husband and I are interested in jumping in 100% into real estate investing. I have been studying and drinking in as much knowledge as possible, and there seems to be so many good options!

Through a legal settlement, my husband and I are expecting to receive about a $100k in another month, maybe more. We also have a rental property (our first house) that has a lot of equity built into it. If we refinance it we could cash out $150K and still have it make $100-200 in cashflow each month.

That being said, how would you spend the money if you were relatively new? Would you purchase many cash-flowing single family? A few multi family? Would you do 20% down and finance with traditional loans or buy outright one property at a time and BRRRR?

We recognize that we are about to be blessed with a tremendous opportunity, and we want to be as wise as we can in investing it for our future and our kid’s futures.

Thanks for your responses and advice!

Taylor L. · Answer

- Step back and figure out your goals. What do you want to get back out of your real estate investments? How much time do you have to dedicate not only to acquiring these properties, but to managing the investments? i.e. whether directly managing the properties (not a great idea) or managing your property manager (better idea).

- Once you've done that, determine which strategy is most likely to help you reach that goal. A high level understanding of each can be helpful.

Also, try to go for base hits rather than home runs. It's tempting to go buy as much as you can right off the bat, but you'll manage your risk by taking your time and learning from your mistakes and missteps as you go.

Honestly, take $100 and buy a few BP books, then read them cover to cover. Go to the BP events section and Meetup.com, find a few networking events in your area, and attend them consistently.

When you go to events, leave your checkbook at home! Some events (not all) will have a speaker pitching a program that's sure you make you a gajillionaire "in one year or less!" Well, buying a coaching program is totally fine, but it should not be done on impulse. Go home, research that person and program, talk it over, then maybe go back and do it.

How would you invest $250K starting out?

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