Best thing to do in real estate with $65k cash?

Question

In Atlanta, but willing to invest anywhere. Tomorrow I close on my first successful flip. I have a fun and practical question:

I'll be coming out with $65k cash. I don't need it to live. I want to reinvest it into real estate with whatever strategy will allow me to multiply the wealth the most and fastest.

I've considered: Sign a lease-contract on somebody's fixer-upper property, renovate it with my money to generate forced appreciation, then when the renovations are complete both (a) buy it and (b) cash-out refinance it at the same closing table, and afterwards run it as a short term rental for the long run.

I am open to any and all ideas. Doesn't have to be a BRRRR, doesn't have to be short-term, doesn't even have to be residential. Hit me with your best shot. I am open to partnering if that's part of the strategy. For the record, my long term goal is to generate enough cashflow to support the poor with a huge empire, but there are many steps of wealth-multiplication between now and that endpoint.

Karl Denton · Answer

Hello Richard,
So first of Congratulations on your first ever flip! That's so amazing, would you want to do another or was this a really good deal you think would be hard to find again. So my goal with having some capital would be to try and use hard money for my next purchase where you could get the money back after refinancing the property. (So basically BRRRR, yes) However short term rentals in your state are probably pretty popular, iv heard of a interesting strategy some are doing. Near big area hospitals there's usually a need for traveling nursing staff and doctors. You can look into Airbnb arbitrage, where you rent someone's place and Airbnb that out. You can find a place near hospitals and that would draw in a lot of traffic from longer stay times. Check it out and see! Unique and very cool investing idea for STR.

Justin Beasley · Answer

65K on your first flip is pretty good. Right now the market is still giving you equity and since you have a little experience now with flips I would keep taking the equity as long as you can.

Eddie L. · Answer

Is $65k before or after Uncle Sam's portion? Congratulations on flip!

Richard Davis · Answer

@Karl Denton Thank you for the tip! I should run a search specifically for potential STR/MTR's near hospitals. Also, I do like arbitrage, but I'm thinking there's more wealth-flow (increase of equity + cash) in BRRRR converted into an STR? From what I understand, a good BRRRR should get you ALL of your investment back out at the time of refinance, and then after that you get ongoing appreciation and your mortgage payments will be less than paying someone else rent. Could be wrong on that: BRRRR does involve those initial renovation months when you have NO cashflow because the property is not yet ready to be rented, whereas arbitrage gives you almost immediate cashflow.

@Eddie L. Thank you! The $65k is before my contribution to Uncle Sam.

@Justin Beasley It's not nearly as good as it looks, unfortunately. Three different contractors (or teams of contractors) did sorry, slow work, and I eventually had to replace them. The end result was that my reno cost was two or three times as high as it could have been. So while I'm walking out with $65k cash (literally: thank God!), my net is much less -- maybe $25k. That said, I did live there myself for a year while house-hacking the rest of the property and then convert it into a 100% rental for about four months. So in addition to my net proceeds, I also got the benefits of a place to live myself + rental payments from my tenants. Also it was just an overall neat experience. There's a good feeling to looking at the inside of a condo, which is now beautiful, and realizing that it is that way because you did that.

Best thing to do in real estate with $65k cash?

Best thing to do in real estate with $65k cash?

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