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Updated over 10 years ago on . Most recent reply

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Scott McCloy
  • Washington, PA
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If you had $100k, how would you invest it in RE

Scott McCloy
  • Washington, PA
Posted
If you had $100,000 cash, how would you invest it in Real Estate. Would you try to buy an apartment complex, SFH, buy and flip? I'm just curious to see some different strategies used if there was some capital involved.

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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
ModeratorReplied

Fix and flip is a business where income producing properties are an investment.  So the first decision is whether you want to invest your money and have it generate a return (rentals) or whether you want to use your money to start a business.  If you're going to fix and flip realize that is an active business that requires you to turn the crank to produce income.  It is, in a very real sense, a job.

Investments, OTOH, produce returns with little or no effort on your part.  Bank CDs and mutual funds are essentially zero effort.  CDs have essentially zero risk, but only a small return.  Mutual funds have more risk but have the potential for a higher return.  Rentals are like those.   More work to buy than CDs or mutual funds and more work to operate, but the return is really coming from your investment.

I wouldn't recommend starting with an apartment building.   Start with SFRs and cut your teeth there.  Easier to buy and sell and a smaller scale to operate.  If you're an experienced landlord, though, and want to scale your investment up, an apartment building has some advantages and disadvantages.  There are a number of threads that debate the merits of apartments vs. SFRs.

In part it may depend on where you want to invest and what sort of deals you can find.

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