$45k in Roth, I can no longer make contributions...how to invest?

[Logan Allec]

So I've been sitting on $45k of cash in my Roth for some time now, and I can no longer make contributions due to IRS limitations.  I'm wary of sticking it into the stock market like I did since I graduated college in 2009 (cashed out on everything earlier this year).  But I also hate sitting on cash.  $45k isn't anywhere near enough money to pay cash on anything local (I'm in LA), but it's a large enough sum for me that I'd like to put it to good use and not let it get eaten up by inflation.

If I were a bit older and closer to retirement, I'm fairly confident that I would invest in notes, but since I'm still relatively young (27), I'd like to use time to my advantage and get in on future equity appreciation since time is definitely on my side here.  But if that doesn't seem prudent in the current market, I'll gladly invest in notes for the next 5 years, hope it all works out, and perhaps by the end of that cycle my account will have grown to $55,000 or even $60,000, and real estate is cheap again.  But of course that's all speculation.

I'm also toying with the idea of investing in an LLC that is currently offering a 2% interest in 10 cash-flowing Indianapolis properties in exchange for $10,000 with a 3-5 year exit plan. I'm still unconvinced, however, since I'd be roughly paying $1,000 for a 2% interest in each property, and I'm not sure that these 1,000-ft rehabbed houses in supposedly "gentrifying" parts of Indy will sustain a $50,000 current valuation and then some, at a clip of 3% per annum, as I'm told by the principles ;)

Thoughts or advice, anyone?

[Brian Fouts]

Congrats on having some funds to work with, that is one of the main issues that many investors run into right out of the gate.

I would just be cautious of asking advice on what to do with the funds on BP, or anywhere online.  The advice is going to be based upon the goals/outcome of those giving the opinion.  you need to be sure to align your goals with someone who has already done what you are looking to do and follow their previous action.  But of course, that is just my opinion... :)

You could easily lend on real estate projects (be a private lender) depending on your Roth custodian and limitations therein.  Could get 12% or more, short term.

We have two investment funds, one pays 10% fixed, another pays 12% fixed, so finding a private investment fund could be an option as they are more passive.  In five years, that would be over $70k.  

You could buy a turnkey real estate property, rental property, etc.  Get good cap rate and possible appreciation. 

Regarding the low entry cash flowing properties, we have over 40 of them and really don't see a lot of appreciation in them due to the market they are in.  The cash flow may be okay, but value is fairly steady.  Just our experience, different markets behave differently.  

Buying notes, to me, is the same as buying real estate to flip, hold, etc.  Depending on how you buy notes, you still want to buy low, sell high.  We bought a lot of notes in the past, but not currently due to the market.  But that is all depending on your strategy, there is always a strategy in any market.