Best long term strategy with 100k

[Ron Buffano]

Hi,

I want to invest in RE for passive income, and I have $100k to invest in. What would be the best strategy?

I found a turnkey duplex for $165k which will give me passives income $600 per month after all expense, but my loan officer said I have to put 25% down. Is this a smart strategy to maximize my $100k?

Is it better to use the BRRRR strategy and make $200-300 a month in passive income to maximize my $100k?

Thank you

[Lee Ripma]

@Ron Buffano

If you go the TK duplex route then you'll need to put down 41.25k (25%) on it with a RES loan. With a commerical loan you can do 20% down. With 25% down you can 2 of them and then save your cash flow for another 20 months and buy the 3rd. With a commercial loan you can 3 of them right now. Are you happy with that return? You'll be getting 1200/mo now and another 600/mo in 20 months. 

In my opinion, the special power of real estate is being able to create equity. If you can do that you can trade up into bigger and bigger projects. Now if you hold your TK duplex and wait, this will happen, you'll get your equity. However it requires the passage of time. However, you could also force this equity into the properties and recycle your 100k over and over and over to build up your cash flow. That is what I did and am continuing to do. It requires doing rehab, partnering with someone to do rehab, or managing someone who is doing rehab. My advice is to yourself what your goals are and how you want to spend your time. Understand the concepts of the BRRRR method or value add commercial investing where you increase the NOI of properties.