All Cash or Loan

[Kevin Goldman]

I have been sitting around and lost out on some multi families in the markets i'm looking at investing in.  I have about $1mil from a sale that I need to put to work.  I live in Los Angeles and do not want to buy in california.  I have been thinking about renting a place for myself and putting the $1 mil to work in real estate investments but diversified in markets, and direct syndication.  i've been in analysis paralysis not wanting to squander this amazing cash out return I got on a property.

I have been trying to figure out if i should look into loans and buying more property for less carry a mortgage and utilize that debt in the future, or just say screw it and buy a couple 100k-300k properties all cash and 1031 in 2-5 years.

any input or guidance on helping me make my ADHD mind up would be great!

I have an agent friend and investor helping me in Toledo Ohio as toledo has great cash flow opportunities.

[Bhargav Hirapara]

Investing in multiple markets can mitigate risk and provide exposure to different economic cycles. Toledo, Ohio, as you mentioned, could be a good option for cash flow properties. However, it's wise to explore other markets as well, such as the Sunbelt region. which has seen strong population and job growth.

Leverage vs. All-Cash

Both strategies have pros and cons. Leveraging with mortgages allows you to acquire more properties and potentially higher returns, but also comes with more risk. All-cash purchases provide stability and simplicity but may limit your portfolio size.

A balanced approach could be:

Use a portion (e.g., $400k-$600k) to purchase a few smaller multifamily properties (2-4 units) in cash-flowing markets like Toledo. This provides immediate income and appreciation potential.

Allocate another portion (e.g., $200k-$400k) as down payments on larger multifamily properties (5-20 units) in growth markets, utilizing leverage. This can amplify returns but carries more risk.

Reserve some funds (e.g., $100k-$200k) for reserves, renovations, and future opportunities like syndications or funds.