20 Million in Real Estate. What would you do?

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20 Million in Real Estate. What would you do?

Deren Huang

Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes

I got featured in a recent blog post of Joe Fairless!

I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.

What would you do if you received 20 million in real estate?

Is that truly the "Highest and Best" use of the 20 million?

Would you invest in something else besides real estate?

Cheers and happy discussion!

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Blair Poelman

Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes

I would be split it up across a couple property types, but I would love to put 100k into buying a Dive bar. Just think how much fun you could have with your own ghetto dive bar. $1 drafts, and microwave pizzas!

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
nah, at that point, I'd have better more important goals than investment returns
6 Reply
Deren Huang
OP
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
8y
@Mike Dymski
What do you mean by that? Goals about family or lifestyle?
0 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
I'd be the bank and have a team of people to deal with lending out the money....
3 Reply
Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
8y
Originally posted by @Deren Huang:

I got featured in a recent blog post of Joe Fairless!
I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.
What would you do if you received 20 million in real estate?
Is that truly the "Highest and Best" use of the 20 million?
Would you invest in something else besides real estate?
Cheers and happy discussion!
I'm all about cash flow, so NNN leases would not cut it. Without a doubt cash flowing multifamily.
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2 Reply
Deren Huang
OP
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
8y
@Matt K.
My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive.
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Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Anthony Gayden:

Originally posted by @Deren Huang:
I got featured in a recent blog post of Joe Fairless!
I mentioned that if I received 20 million in real estate, I would go for NNN lease properties.
What would you do if you received 20 million in real estate?
Is that truly the "Highest and Best" use of the 20 million?
Would you invest in something else besides real estate?
Cheers and happy discussion!
I'm all about cash flow, so NNN leases would not cut it. Without a doubt cash flowing multifamily.
Cashflow if you want to be a landlord lol, NNN about as passive as you can get. Plus add in a big player like Starbucks and sit back and collect those checks.
1 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Deren Huang:

@Matt K.
My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive.
Hence the team comment and go towards the commercial side of things
2 Reply
Deren Huang
OP
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
8y
@Anthony Gayden
Would you still look for value add? Seems like you still would be hustling even with 20 million.
0 Reply
Deren Huang
OP
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
8y
Originally posted by @Matt K.:

Originally posted by @Deren Huang:
@Matt K.
My thinking is that it would be a ton of work to get 20 million out there working for you, and if you are talking hard money, the turn over 6-12 months would be labor intensive.
Hence the team comment and go towards the commercial side of things
What are the rates for commercial?
NNN's are running 5-6% back. (Not quite sure, I'm not quite there in my career haha)
Obviously there would be funding fees and points included to profit, but no depreciation and tax shelter.
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Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
@Deren Huang I don't have the slightest clue, I also don't have 20 mil so never really looked into it. I can say though, there's something to it if high net-worth folks and hedge funds are doing it.

I can tell you this, I'd have plenty of people much smarter than myself help me create a plan and take care of the details well before I hit the 20 mil mark. They can handle the tax strategies etc....
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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.
2 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Caleb Heimsoth:

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.
Wouldn't 1.6M return = retirement at almost any age haha....
5 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Originally posted by @Matt K.:

Originally posted by @Caleb Heimsoth:
Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.
Wouldn't 1.6M return = retirement at almost any age haha....
Probably but if I was say below 40 I’d probably just go do something else like start my own business or something. It also depends on your personality, I’ve known of or heard of people who make more than 1M annually and still work into their 60s.
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Chris Masons
Investor · Union, NJ · Member since 2011 · 838 posts · 295 votes
8y
With 20 million in liquid I would probably not be investing in RE. More likely more along the lines of cash preservation and a lot more conservative like bonds and treasury bills.
With that kind of scratch all you need is 3% annually even 2% would get you 400k! That is plenty! NO need for any additional risk
Chris
4 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Caleb Heimsoth:

Originally posted by @Matt K.:
Originally posted by @Caleb Heimsoth:

Do you mean 20M in equity or just property value? Assuming I earn 8 percent return on my 20M that would equate to 1.6M per year. At that level I would probably be devoting my time to some philanthropy, helping others and traveling, assuming I was even remotely close to retirement age.
Wouldn't 1.6M return = retirement at almost any age haha....
Probably but if I was say below 40 I’d probably just go do something else like start my own business or something. It also depends on your personality, I’ve known of or heard of people who make more than 1M annually and still work into their 60s.
I get what your saying... I know people who will work every day of their life regardless of what's in the bank.
1 Reply
Blair Poelman
Real Estate Broker · Provo, UT · Member since 2013 · 689 posts · 511 votes
8y
I would be split it up across a couple property types, but I would love to put 100k into buying a Dive bar. Just think how much fun you could have with your own ghetto dive bar. $1 drafts, and microwave pizzas!
7 Reply
Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
8y
@Deren Huang I'd buy a few day care centers, invest in a some doctors/dentist/vet practices, and maybe some Jimmie Johns franchises (because who doesn't like Jimmie Johns?)
Also buy the buildings that held some of those business.
1 Reply
Account Closed
Rental Property Investor · Houston, TX · Member since 2018 · 106 posts · 56 votes
8y
@Deren Huang Depending on your age, you would do 40/30/30 strategy. If you are in your early 30s, 40% in equity, 30% in short term bond (liquidity), 30% in real estate and inflation protected assets such as gold.
It's always good to diversify your return streams.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
double tax free AAA muni's
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4 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
other wise HML in SF bay area SF to las Gatos that would only be 5 to 7 loans a year.. not too much work.. make 8 to 9% with not a lot of drama. just need to be careful in picking the borrower... but that those levels the borrower will have 1 to 2 million in cash skin in the game.. so you do mitigate the risk.
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2 Reply
Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
8y
With 20M I definatly would not be working anymore. 20M is way more money than any normal person would ever need. With that much money working at investing is a waste of both time and energy.
I would put it all in secure guaranteed investments, extremely low risk/low returns but with 20M in equity who cares. It would finance the rest of my life without ever touching the principal.
1 Reply
Jonathan Orr
Developer · Boise ID · Member since 2016 · 287 posts · 110 votes
8y
If I had $20 million I would continue commercial development. Go straight into land development to develop different asset classes. Would be able to build at cost to maximize long term hold returns.
0 Reply
Deren Huang
OP
Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
8y
Originally posted by @Thomas S.:

With 20M I definatly would not be working anymore. 20M is way more money than any normal person would ever need. With that much money working at investing is a waste of both time and energy.
I would put it all in secure guaranteed investments, extremely low risk/low returns but with 20M in equity who cares. It would finance the rest of my life without ever touching the principal.
Totally with you!
Another person mentioned in the post that he would just put it in a bond at 1%, said it was good enough for him.
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
8y
Yep, biggest problem wealthy people have is not knowing when they have enough. Surveys show that the more they have the more they think they need. Ultimatly they work till they die chasing the dollars.
Up side is their kids are happy when they finally kick off so they can liquidate everything and live like kings.
1 Reply
Matt K.
Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
8y
Originally posted by @Thomas S.:

Yep, biggest problem wealthy people have is not knowing when they have enough. Surveys show that the more they have the more they think they need. Ultimatly they work till they die chasing the dollars.
Up side is their kids are happy when they finally kick off so they can liquidate everything and live like kings.
There's plenty of non wealthy people that work till they die nonstop, it's just a mindset.
http://abcnews.go.com/US/WNT/story?id=1756219&page...
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