How to invest $500K?

[Sharon H.]

Hello everyone,

I just sold my rental property in San Fernando Valley. It was my primary residence before becoming a rental, so the gain is tax free due to the primary residence exclusion. Now, I have about 500K free cash in my bank account to invest.

I was thinking about using the net proceeds to invest in multifamily; however, after COVID-19, landlord does not have right to evict any unpaid tenants. And it seems like second wave is coming; restaurants, retail and the tourism industry are closing back down. The eviction moratorium could be extended to god knows how long but doesn’t sounds like the loan forbearance is going to be. It made me rethink about being a landlord and investing in multifamily.

On the other hand, there are mixed signal from the housing and stock market. While the housing market was slow in March to May, but it has gained steam since June in my neighborhood. The stock market has been recovered beyond the January level. The market seems to be very optimistic.

If you were me, what would you do to invest the money? My goal is to have $5000 investment income every month in the next 5 years.