Best way to invest 60-70K for passive income??

General Real Estate Investing
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Best way to invest 60-70K for passive income??

Gustavo Juarez
Member since 2020 · 9 posts · 4 votes

Hello all, my goal is to achieve financial independence through passive income and I am very excited to begin investing in real estate.

I am in the middle of a cash out refi on my only rental property and I expect to pull out around 60-70K.

What is my best/realistic option at making the best use of this capital?

I am completely new to real estate investing and would appreciate any pointers from experienced investors.

Thank you!!

PS I live in Milwaukee, WI and the market is very hot right now. Duplexes in my area go from 75-150K and I would like to invest in more of them or even triplexes or fourplexes.

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Aseel YerunkarPro Member
Investor · CA · Member since 2019 · 63 posts · 51 votes
6y

@Gustavo Juarez 
Really depends on a lot of personal goals, and risk tolerance.

You have a couple options :

  • If you are okay with taking on a challenge with a little more risk you can start trying to grow that capital stash even more and do an entry level flip.
  • If you want something less risky but still want your money to not be immediately/fully tied up learn the ins and outs of the BRRRR strategy. Depending on your market you may or may not be able to do this for cashflow but it will still allow you to have a faster velocity of money. You might not be able to get all your money out the deal but goal is to acquire an investment property with much less than your traditional 20% down loan at the end after you refi the property.
  • If you want something significantly more passive and don't mind letting your money sit in a deal for a long while you can simply buy a turnkey rental property.
  • You can also House Hack. If you do not already own a house I, personally, would make this the first priority. It's very feasabile to house hack in most markets and greatly reduce you month to month living expenses while investing in an appreciating asset. In many markets you can essentially live for free and then some.
  • If you do already house hack, I would  again personally take a portion of that capital and invest it in a rental/brrrr, and take the rest and flip a house and keep getting more capital to invest in more rentals.

Hope that helps! Feel free to hit me up for any questions.

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  • Aseel YerunkarPro Member
    Investor · CA · Member since 2019 · 63 posts · 51 votes
    6y

    @Gustavo Juarez 
    Really depends on a lot of personal goals, and risk tolerance.

    You have a couple options :

    • If you are okay with taking on a challenge with a little more risk you can start trying to grow that capital stash even more and do an entry level flip.
    • If you want something less risky but still want your money to not be immediately/fully tied up learn the ins and outs of the BRRRR strategy. Depending on your market you may or may not be able to do this for cashflow but it will still allow you to have a faster velocity of money. You might not be able to get all your money out the deal but goal is to acquire an investment property with much less than your traditional 20% down loan at the end after you refi the property.
    • If you want something significantly more passive and don't mind letting your money sit in a deal for a long while you can simply buy a turnkey rental property.
    • You can also House Hack. If you do not already own a house I, personally, would make this the first priority. It's very feasabile to house hack in most markets and greatly reduce you month to month living expenses while investing in an appreciating asset. In many markets you can essentially live for free and then some.
    • If you do already house hack, I would  again personally take a portion of that capital and invest it in a rental/brrrr, and take the rest and flip a house and keep getting more capital to invest in more rentals.

    Hope that helps! Feel free to hit me up for any questions.

    2Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    6y
    Originally posted by @Gustavo Juarez:

    Hello all, my goal is to achieve financial independence through passive income and I am very excited to begin investing in real estate.

    I am in the middle of a cash out refi on my only rental property and I expect to pull out around 60-70K.

    What is my best/realistic option at making the best use of this capital?

    I am completely new to real estate investing and would appreciate any pointers from experienced investors.

    Thank you!!

    PS I live in Milwaukee, WI and the market is very hot right now. Duplexes in my area go from 75-150K and I would like to invest in more of them or even triplexes or fourplexes.


     That really depends on your financial goals, the investment is what gets you there. We buy and rent single family homes, because they are the most passive type, appreciate individually and can be sold at full retail to a consumer - and that supports our goals. Duplexes might be a better match for your goals.

    You are right about the market being very hot; you can check out my market update video on my BP profile page. The median price for a duplex in Milwaukee is in the low 200s; anything in a school district better than MPS will be 300k or over.

    We don't have a large stock on triplexes, most are really duplexes with a finished attic, which comes with a whole list of construction concerns, depending if it is built out as a hot or cold roof, mostly hot and half the time not correctly. Sorry I am digressing

    We do have a fair number of 4plexes; they are typically located in clusters, come with a parking slab and no garage parking - mostly the Milwaukee version of affordable housing.

    You have 3 ressources you can invest: time, money and energy. They are somwhat interchangable, so if you don't have much of one you can use more of another. How much of each you have (and are willing to invest) will be a big part of what type of REI will work best for you!

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  • Whitney HuttenPro Member
    Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    @Gustavo Juarez You have some great advice so far.  Here is a guide on how I would initially approach setting up your real estate goals. As Marcus mentioned, you have to determine what's more important to you. For me it's my time, so I look for leveraged strategies (but they don't pay as much).  PM me with Qs!

    Podcast Guest on Show How to Build Generational Wealth Without Losing it Along the Way
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