What would you do with $50,000 for 8-12 weeks?

Question

I have just refinanced a property that I bought and renovated this year, and, after paying off the rehab debt, I have about $50,000 cash sitting in my bank account from the mortgage money that just came through today.  I want to use this money toward buying my next property in 2-3 months but in the meantime, is there any short term investing or anything else I could do with $50,000 over the next 8-12 weeks?

I realize I can put it in the bank but really am looking for something that might give me a bit more real estate experience.  Or just wondering what you experienced investors do when you have cash sitting in your bank for a few months.

The market here in Edmonton, Alberta, Canada (look at me throw out those key words!) is a bit over-inflated at the moment in my opinion, considering the recent job losses from oil prices, as well as the related rental vacancies.  So that's why I don't want to buy right now, but I'm also going away for most of January on vacation, so don't want to be managing a rehab.  I'm hoping that there will be a price drop between now and February - winter is never a boom time in this land of -30C winters anyway...

This current project will be rented and it's the only thing I own right now.  I have had another rental and also done one flip in the past.  I have some negotiation and legal experience through work and so love contracts.  I know this is all rather vague but I'm not wanting to limit any responses that might bring in an idea I never thought of.

Thanks for whatever crazy ideas you can throw my way!

Pam

Matt Motil · Answer

Hi Account Closed, I sent you a message. I might have a couple short-term projects that you could be interested in.

David Dachtera · Answer

If you're willing to wait more than the 12 weeks, there's bound to be some local fix-and-flipper who could help you pad your account a bit while they do the repairs, provided they can refi afterwards to pay you off even before they have a buyer/tenant.

Even if you only take 12% (1% per month), that's another $5,000 on top of your $50,000.

Be sure to insist on reviewing the deal to make sure they know what they're doing and they actually have things lined up to pay you back.

Ram Srinivasan · Answer

Account Closed comments - Finder a credible flipper and loan it out for a few months. I would keep the ARV of the loan under 80% in this market. I personally do these loans in TFSA/RRSP acocunts for tax benefits.

It's a great way to earn on your money rather than it sitting stagnant in your bank account.

Alternatively, nothing wrong with what Aaron Choi said - no harm in putting your money in that kind of account while you are looking for something.

To me US investing is getting less attractive by the day. The opportunity now is gone - with the Dollar exchange at 0.72USD today.

Aaron Choi · Answer

Account Closed - I agree with Jett and Cal. In the absence of any opportunities and for a complete hand off approach. Tangerine is offering 2.4% return for 6 months if you open an account now. No hassle no risk guaranteed return. Let me know if you go that route!

Cal Ewing · Answer

@Marcel Noel I don't mean to completely rule out your creative idea however, when it comes to Texas Tax Deeds, 6 months is a bit of a myth. You are mostly limited to vacant lots and raw land when it comes to the 6 month redemption period and even then, by the time you get the deed from the county you are probably looking at closer to 8 or 9 months, at least in my experience. Residential real estate has a 2 year redemption period as a rule of thumb.

There are ways that you could complete an entire tax deed transaction in 6 months or less but it would be pretty tough.

Account Closed, I wonder if you could lend it out in the short term. There must be some kind of situation where a borrower would need money in that time frame. I bet some of the savvy private lenders on BP can help.

Account Closed · Answer

@marcel noel, @cal ewing, Thanks for the information about texas tax deeds - although it might not help me now, I had never heard of them before.  I've done some research on them and it's something I will keep in mind for the future.

I have asked around a bit in Edmonton and it looks like no one has any short term project planned over the holiday.  Maybe all expecting a drop in the next few months, like I am.  It's crazy what people are trying to sell houses for on MLS at the moment, given the recent job losses..  I'm advertising a suite for rent on Kijiji and the ad is going to page 30 within 24 hours - i.e.  600 local postings a day!  Maybe all the tenants are out buying instead, because the mortgage interest rates are at 2.1%....

Scott Carder · Answer

8 to 12 weeks you sit on the money. Anything else doesn't make sense IMO.

Jett Rao · Answer

Hi Pam,

Could you potentially attend some local REAs and find investors who need short term loans to finance flips etc?

Marcel Noel · Answer

HaHa funny you would respond to my response I actually seen the Texas stuff on your site and watching your videos on YouTube and I actual was going to put your name in the original post but didn't want to discredit you. I knew that my info wasn't 100% credible, I haven't done it, it was just in my brain at that time. I have been doing so much research lately trying to get something rolling. I'm in the door way I just can't step through. I don't know where to invest. Cal your one of the top guys in the field and I would like to know more of what you have learned in regards to tax deeds in Texas with your partner Mike Wolf. I want to learn the steps, business plan, due diligence, and the process, of a deed investing.

P.S thanks for setting me straight on the redemption thing, sorry Pam for getting your hopes up for the short term thing. Maybe you can answer this one Cal can you buy over the counter tax deeds in Texas that are close to the end of there redemption cycle? Thank you

Marcel Noel · Answer

Texas deeds 6 month redemption make a big ROI and get a property in the end just have to do your due diligence. This is just what I have heard, there are people you can partner with and they will do the heavy lifting while your away on holiday. Just to repeat that I haven't done this my self but I have researched it quite a bit. Something you might want to look at.

What would you do with $50,000 for 8-12 weeks?

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