Your bet on the single best investment for the coming 2-5 years ?

Question

Just to allay any fears up front, I generally have my funds invested conservatively, and I have a significant amount still in cash to continue investing in what I expect to be some great deals in syndications and other private deals in the coming year or two.

With that said, I want to place a big bet (big for me anyway - say $10,000-20,000) on whatever I conclude is likely to produce the greatest return over the coming 2-5 years from the current situation.

Let's assume it's a given that most here will bet their time and money on their own company first. For the sake of this thought experiment though, you can only invest cash in something that you are not personally involved in . . .

One thought is to buy Calls on Blackstone . . .

Where would you place your bet ?

Scott Passman · Answer

Your own financial education. You'll never regret it and you'll never stop reaping returns from it.

Benjamin Goodman · Answer

@Scott Kelley  Self-storage is one of the best real estate plays in a recession....

Nick Heil · Answer

One way you can passively invest in self storage is to buy the publicly traded REITS. Extra Space Storage (EXR), Public Storage (PSA), Cube Smart (CUBE), Uhaul (UHAL), Life Storage (LSI), Global Self Storage (SELF), National Storage Affiliates (NSA), Iron Mountain (IRM), Big Yellow (BYLOF - this one is traded in the U.K.), StorageVault Canada (SVAUF - this one traded in Canada)

Blake Dailey · Answer

Cash flowing property purchased at below market value - it's hard to go wrong! I am personally shifting to multifamily investments to capitalize on the reduced risk provided by multiple units under the same roof and analyzing for cash flow and value-add.

Josh Collins · Answer

I have a feeling that the best performers over the next 2-5 years are going to be the following (other than self-education because that's going to be the best ROI if you actually put the knowledge to work):

1.) Gold as a savings account (10%)

2.) Cash - you'll be able to convert your knowledge into an asset (50%)

3.) Note investing (15%)

4.) Self Storage Real Estate (25%)

I don't hate SFH but you have to pick the right markets.  And honestly, I don't know which markets at this point.  It'll probably depend a lot on income to rent ratio, job market and how quickly those jobs come back.  Very area dependent.

My wild card in this is finding STRs with a wilderness aspect to it.  So people can get away from the crowds of Nat Parks.  This has to be close enough to population centers to support during downturns, pandemics, etc.

Feel free to argue with me but I don't like hotels and STRs all that much.  I know it's a long shot, but what happens if we have another pandemic to follow this one up?  Okay, so that's a long shot.  What if just 25% of people can't afford to go on vacation and/or don't want to stay in a hotel for 5 years?  That kills a lot of your demand.  I would want something that performs no matter what in the next few years.  I don't hate apartments but I wonder if people will be fleeing these high density living in years to come.  I'm only thinking 10-15% of the population.  I think that's enough to raise concern.  I'm not saying no, I'm just saying I'd like to see how this plays out.  With that said, because of my conservatism on this, the market would likely pass me by - all the good deals would be taken by the time I'd have the "all clear".

This is fun.  I'd love for anyone to poke some holes in my theories or give their recommendations.  But I don't want your hyperbole, I want to know what you're going to spend your hard-earned cash on!  ;0)

Stay safe out there!

Todd Dexheimer · Answer

Oil, single family homes, discount airbnb.

Scott Kelley · Answer

@Scott Passman, @Stephen J Davis, @Chris Seveney

I'll give it to you guys that Your own education is a hard investment to beat, but the stipulation was that you can only invest in something that you're not personally involved in, so I'm calling this a technical foul...  Remember, this is bettin money - your best idea for how to take advantage of the opportunities that will play out over the coming 2-5 years.  Could be something that you think is a sure thing with moderate returns, or long odds on a huge return...

@Paul Shannon - I'm with you - I no longer try to outguess the timing of the market - my calls on Blackstone would be long term (Jan, 2022).

Chris - This is a bet on the opportunities that will play out over the coming 2-5 years - I'll bet you've got some ideas that will pay out better than 18%...

@Nick Rutkowski - I love how you are not only jumping in "when there's blood in the streets", but looking around to see where the blood is running deepest!  So, your mom has been cooped up for all these weeks and can't wait for Vegas to open up again - you know she's gonna blow her usual ten grand - where are you gonna convince her to bet that money on hotels instead?  (OK, her investing in your company wouldn't technically violate the rule... but it would violate the spirit).

C'mon @Josh Collins - you're hedging your bet - gotta put it all on one number!

@Todd Dexheimer - how would you invest in oil?

@David Smith - 10k can get you into a SFR, but you can't put the bet on yourself... $10k cash - who you gonna put it on (decide quick before I take it back)...

@Benjamin Goodman - how would you put your (passive) $10-20k into self storage?

@Blake Dailey - how would you invest your $10-20k in MFH other than your own deal to best take advantage of the coming opportunities?

Josh Collins · Answer

@Scott Kelley - If I had to pick just one thing, I'd say that there will be some very good opportunities in Note Investing but you'll have to wait a while.  The risk is if it turns out that the deals aren't that good, you'll have missed out on everything else too.  Hence the reason for my other hedges.

The biggest thing you have to ask yourself (and not look back) is whether or not you think this is going to be a short term downturn in the economy or a longer recession-type of a downturn?  The trouble is if you think it's shorterm pain and it turns out to be longterm pain, then what?  I think you have to be conservative with the money you need and you can be aggressive with your "fun" money.

I think I got off the original poster's main question in that they have $12k to invest and what would I do with that.  I'd say that person should figure out what they want to invest in, learn as much about it as possible, and be ready to jump when a good deal presents itself.  If it's your first, last, and only $12k to invest, I think you get a little protective with it and try to get your hands on something that is guaranteed to grow, albeit slowly, to protect your principal.  Once that's done a few times, then you can get aggressive.

This is my opinion and is probably based on some preconceived notions that I drew based on the original post.  I'm assuming it's their first $12k to invest.  I'm assuming they need this money to perform.  And I'm assuming they are risk averse to losing it.  Some others would say, it's "only" $12k, put it all on black until you have $100k, $1M, etc....

Hai Loc · Answer

Import Export, Natural Resources, Farming

Kirk R. · Answer

brk.b

Your bet on the single best investment for the coming 2-5 years ?

Most Popular Reply