What would you do with $100K cash??

[John Hamilton]

Good Morning Bigger Pockets,

I just wanted to start a fun discussion and see what everyone would do if they had $100k cash. I'm not implying that I have $100K, but just wanted to see how seasoned investors and new real estate investors think alike and differently. It could be a beneficial learning experience for everyone to make their money grow! 

Wishing everyone a prosperous real estate experience!!

[Mark Gee]

Good morning @John Hamilton. I'd want to my $100k to grow into $300k and set that as my goal within 24-36 months. Put it in my journal and see that goal every morning. I'd be inclined to do it as quickly and safely as possible.  For me, that would mean value add rentals.  So for easy math I'd purchase and control 2 properties with about 40-45k invested in each.  The remainder (along with some credit cards or other private money if needed) would be used for a very timely rehab and rent.  I would make sure I had a few hours a day to keep both projects moving along and contractors on pace. Bonus if its a contractor I've worked with in the past and know how they operate. I would do very little manual labor myself and just focus on the project management.  These value add deals would mostly involve cleaning, painting, repairing a few leaks, new appliances and carpet.  Nothing major.  Possibly a couple new windows.  They would be in good areas where homes are selling in less than 90 days.

The rents would bring in >12% return. After 1 year, I would 1031 exchange those properties for another set of similar, more expensive value add rentals. The money is really made upfront, so the discount to ARV should be substantial with more than 1 comp to back it up. I like at least a 30% discount (including rehab costs). Use the BP calculators to discern what makes sense and not lose sight of holding costs. Be conservative and find winners by running as many properties through your filter as possible.