Best use of $200K?

[Joe K.]

Hi All!

Question:

What do you guys see as the best way to deploy $200K in capital currently? SF rentals? Multi-family? Commercial? As a newer investor, is it best to find things in my area, or does looking anywhere in the country make sense?

Background:

I'm a relatively new investor. Been trading stocks for about 10 years, but recently decided to diversify and get into some real estate. Bought a SFH in our small town for $125K in cash about 8 months ago. I'm getting $1250/mo for it (which is REALLY high for my area, congrats me, I guess). However, my tenant asked if I'd sell it. We are currently under contract for $140K (no agent). Between the $15K gain on the property and the 10K in rent I've received, it seemed too good to pass up making $25K on a $125K investment in 8 months. With the cashflow it was throwing off and the way the market is, maybe selling is a bad idea, but...we're in Illinois and the regulatory climate here is....questionable. I'm wondering if I want to be in IL long-term or not and if I want to be in SF rentals long-term...

Thanks in advance! Looking forward to learning from everyone here!

[Joe K.]

Quote from @Nathan Harden:

It sounds like you are already questioning if you want to be in SF rentals and you were only a landlord for 8 months. 

This quote "I'm wondering if I want to be in IL long-term or not and if I want to be in SF rentals long-term..." 

Thanks Nathan, appreciate the input. To clarify, I didn't find being a landlord that bad. I managed it myself and can't say I found it to be bothersome or a lot of work or anything. It was an 85+ year old house and had little issues, but nothing that was outside of what I expected when getting into it.

I'm mostly curious what others are seeing as good opportunities these days and how difficult it is to manage something not geographically near you.

My long-term goals are to build at least $250K/yr of income from real estate. I am feeling like commercial or multi-family may be a better path to that, as it feels like it would take a lot of SF rentals to get there. Over my years, I've learned the value of asking questions, and listening to advice, from people that have been there and done that.

Thanks all!