Strategy: What To Do With My First 100k Cash?

[Lou Ruggieri]

My best friend from HS has been working diligently for a long time and has managed to accumulate about 100k in cash savings. He only has one house but wants to jump into RE. Bc I am obsessed with RE, keeps asking me what he should do with his money and I said I would look into it for him (hence why I’m here). Just wanted to know what YOU would do with 100k right now if you were just starting out. In terms of goals, he wants passive income to support his lifestyle so he can ultimately quit his day job. It doesn’t sound like he wants to flip bc he doesn’t have any real experience or connections in terms of a trustworthy team. Also, he lives in NJ. Obviously I’m going to advise him wait and learn as much as he can before making a decision but I just would like some ideas to steer him towards from the pros. Thanks!

[Bob Floss II]

It sounds like he doesn't want to be hands on with the investment, so he should think about being a hard money lender.  He can loan money out to rehabbers and collect interest and watch his money grow. 

However, you also stated he wants passive income to retire.  The other option to purchase value-add income property.  He could buy an two-flat or apartment building, depending upon your area, that needs a gut rehab.  He can buy it cheap, fix it up and get it rented, and then refi to pull his money out.  He can then turn around and do the next property and keep stacking them up and accumulating rental income.