25K Cash in Hand - What to do?
Bradenton, FL · Member since 2023 · 12 posts · 6 votes
25K Cash in Hand - What to do?
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Real Estate Broker · Palm Bay, FL · Member since 2017 · 175 posts · 89 votes
3yGuys, let's be honest, she said she has "CASH". AS IN, NOT DIGITAL FUNDS IN AN ACCOUNT... Sounds like she has green dollar bills. Someone told you correctly, you would want to get that money in a bank and let it season while you are figuring out where to deploy the future digital cash, unless you have a REALLY GOOD place to explain where that came from. I have literally had several instances where someone had massive amounts of cash under mattresses etc lol. If you are buying your first property, you could go 3.5 percent down FHA, or there are some really good 3 percent down Conventional programs with your score. Buy your first property as a primary residence, with the INTENT to live in it for a year, and then grow it from there! Over our way on the East Coast of FL has some really good options as well! Many builders of new homes right now are offering great interest rates / closing costs etc. Sounds like you are well on your way and came to a great resource!
34 Replies
- Member since 2022 · 2 posts · 1 vote3y
I think you should put it in a treasury bond and get a safe 6.8% return right now. They might not come as high again for decades if you don't take the opportunity.
- Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes3y
Hello Claudine Sterling in Bradenton. It amazes me how a Newbie can even "think?" to do something Big with $25K and not know the IRS Rules for First Time Home Buyers. Do you have a J.O.B? Do you own a Home? Have you ever bought a property before? Do you know that properties in Florida are Selling at All Time Highs? I paid $175K Cash two years ago, for a 1500 sq. foot 3/3 Townhome with garage and pool in a 17 unit Community with low HOA fee. Its on a hill, without any big trees to maintain or blow down. Built in 2016, looks like new and we just paid a million dollars for new roofs paid for by our HOA fees. I spent a year looking at 3/2 houses in Brandon with pools and all the Condos and Townhomes, new and old in Brandon area before I finally decided on this Townhome which is now worth $310,000. I had Rentals in S. Tampa for 35 years and studied every day with books and online with youtube videos and seminars on weekends and was a member of a Stock Club in Tampa. I have researched Bradenton several times for another opportunity and I don't find one. I assume you know nothing about Sarasota and the value of anything down there? The safest thing for you to do is to try and find a fixer upper house or Townhome to be your first Home. You get all the easiest financing and discounts with that. You have to live in your Owner Occupied Residence and Homestead it for two out of five years, before you can Sell it Tax-free as your Residence. In the meantime IF you have the Cash you find another one and Rent it until you Sell your Residence and move into your Rental. That is the way you can make Tax-free Profits if you pay attention to the right time in the R.E. Business Cycle to Buy and Sell with this Method, for the rest of your life. This is the safest thing you can do. Or...you can take your 25K and Buy Nat Gas, NT Futures at $2.00 and sit back to wait for it to Double. Study up on everything you can until then and be an Educated Investor when you do pull the trigger on a discounted property in Bradenton. From this time in the Cycle you cannot expect Appreciation over the longterm to make you any Profits on Single Family Homes or Townhomes as a First Time Investment. But, you do need a place to call Home. Study with Dave Ramsey for a start. He is on 1160 AM radio every day.
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes3y
Quote from @Claudine Stering:
Hello all,
Just starting out and I've read so many books and still haven't found the right path/advice. I have 25K cash and have been told several 'must do' with. 1) Immediately put in your saving account 2) Put it in a high yield savings account 3) Must age/season for 3-4 months...
Where do I go to get the correct and best sound advise?
Thanks much!
Looking forward to do the 90 Day Challenge!
Regards,
Claudine
I'm a little late to the party but here's what we've done in the past with clients that have had a sudden influx of cash and want to purchase a home
1. The obvious 1st thing is to make sure the $ is invested in something that is liquid; checking, savings, or money market,... Anything where you can pull the money out without any penalties. Then let it season in the account
2. Since some lenders worry about a sudden influx of cash into an account I would get a letter from whoever provided you with the money that explains the reason for the sudden influx. Example: If it's a relative or an inheritance you can ask them to provide you with a gift letter. You may not have to use the letter but at least you have it if a lender inquires about the sudden influx.
3. Get pre-approved for a loan. If the lender asks about the sudden influx of cash you'll have the letter in hand to explain it
4. With pre-approval in hand go find your home. - 3yDevin PetersonBusiness MemberLender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
Hi there! Hope you don't mind if i step in here give some advice - I would defintely not exhaust all of your immediate capital or reserves. $25k is a good amount, so it sounds like what you have been doing thus far is helping you increase savinngs. I would dry underwrite some deals and go through the motions of the process that way when you have some more capital you are ready to commit without hesitation. I would be happy to speak to you directly, I am located in St. pete just near eckerd college. If so, please send me a PM and Im happy to connect! Good luck!
ProAlpha Capital56 Reviews - Bradenton, FL · Member since 2023 · 12 posts · 6 votes3yGood morning, Mr. Haynes
Quote from @Michael Haynes:
Hello Claudine Sterling in Bradenton. It amazes me how a Newbie can even "think?" to do something Big with $25K and not know the IRS Rules for First Time Home Buyers. Do you have a J.O.B? Do you own a Home? Have you ever bought a property before? Do you know that properties in Florida are Selling at All Time Highs? I paid $175K Cash two years ago, for a 1500 sq. foot 3/3 Townhome with garage and pool in a 17 unit Community with low HOA fee. Its on a hill, without any big trees to maintain or blow down. Built in 2016, looks like new and we just paid a million dollars for new roofs paid for by our HOA fees. I spent a year looking at 3/2 houses in Brandon with pools and all the Condos and Townhomes, new and old in Brandon area before I finally decided on this Townhome which is now worth $310,000. I had Rentals in S. Tampa for 35 years and studied every day with books and online with youtube videos and seminars on weekends and was a member of a Stock Club in Tampa. I have researched Bradenton several times for another opportunity and I don't find one. I assume you know nothing about Sarasota and the value of anything down there? The safest thing for you to do is to try and find a fixer upper house or Townhome to be your first Home. You get all the easiest financing and discounts with that. You have to live in your Owner Occupied Residence and Homestead it for two out of five years, before you can Sell it Tax-free as your Residence. In the meantime IF you have the Cash you find another one and Rent it until you Sell your Residence and move into your Rental. That is the way you can make Tax-free Profits if you pay attention to the right time in the R.E. Business Cycle to Buy and Sell with this Method, for the rest of your life. This is the safest thing you can do. Or...you can take your 25K and Buy Nat Gas, NT Futures at $2.00 and sit back to wait for it to Double. Study up on everything you can until then and be an Educated Investor when you do pull the trigger on a discounted property in Bradenton. From this time in the Cycle you cannot expect Appreciation over the longterm to make you any Profits on Single Family Homes or Townhomes as a First Time Investment. But, you do need a place to call Home. Study with Dave Ramsey for a start. He is on 1160 AM radio every day.
Details... details... and the attention to details. First off, there is no "L" in my last name. Ok, now walk with me a bit. I'll admit, my post was short and left plenty of room for ones mind to wander. The replies went in two directions... Those that "got" it, and from the others, an abundance of knowledge, starting point tips, other suggestions and best wishes on my journey. So incredibly grateful to all.
You, Mr. Haynes, just ran off with it, right off the cliff. Your presumption of my dilemma and self is quite laughable. Your post reads like a diatribe with a hint of arrogance.
"Newbie" - Correct, regarding REI
"Think" and "Big" - I'll circle back
The $25K - @kristina Kuba , @Crystal Smith, @Doug Smith and to the others that "got" it - Their responses are what I hoped I'd gather from these forums on Bigger Pockets. With replies, I take note... and then keep reading/listening/absorbing/writing.
Rinse, Repeat.
J.O.B - Come on Michael, if I may call you by your first name, who really uses that phrase anymore?
Assumptions... One should never make those, I thought we all agreed on that? Did I miss a memo?
Florida Housing Market.. Check. When I was relocated here (Did you pick up on that Michael? It's a clue to your J.O.B. question), I couldn't believe the cost of living - everything is so inexpensive in comparison with Southern California.
OK, Ok.. not going to dissect your entire "fist shaking in the air and fingering pointing" rant - people have far more important things to be doing.
The $25K is CASH, that tangible green paper stuff with funny recognizable faces on it. That was the KEY to my post. The "got" it.
As promised, circling back to "Think" and "Big" - Delete all that other fluff you spat and what's left... Two incredibly powerful words.
So with that Mr. Haynes, thank you. Your belief and encouragement means everything to me. Have an incredible day!
"If people aren't calling you crazy, you aren't thinking big enough" - Richard Branson
- Real Estate Agent · Saint Petersburg, FL · Member since 2018 · 39 posts · 25 votes3y
This seems like the perfect question for a lender. I work with some great lenders in St. Pete if you don't already have some in mind. Grats on the $25k, it's a great problem to have!
- Investor · Tampa, FL · Member since 2016 · 681 posts · 288 votes3y
Hello Claudine Stering, You asked for advice. Apparently, you already know what you can do with $25K at this time in Florida. How about a final Reality Check? Are you Pre-qualified for a Loan with anybody? Usually that is the first step towards being able to make Offers on properties. That's called Due Dilligence. Good Luck
- Real Estate Consultant · Miami · Member since 2023 · 165 posts · 62 votes3y
Quote from @Kristina Kuba:
If you received it from family, they can write a gift letter and/or as long as it came from somewhere and it can be sourced you can use it for a mortgage downpayment. I would double check with a seasoned and experienced mortgage broker. DM and I can connect you.
If you are looking to buy and build wealth, have you considered a FHA on a multi family?
If I could do it all over again and not have a spouse and dogs, etc. I would use my FHA loan for a 4 unit building. It is more difficult to house hack later in life if you have a larger family, so keep that in mind.
For example, in Hillsborough an FHA loan can finance up to $809,150 for 4 living-units. That is only 28,000 plus closing costs, very close to your 25k savings. Tampa, the main seat of Hillsborough county, has seen a cool off just like the rest of the country and getting a 4 unit in that price range is attainable.
I know you are in Clearwater but I am I am bullish on Tampa because of Bill Gates multi billion dollar investment into downtown Water Street and the GasWorxx projects, both are transforming large swaths of the downtown and the urban core.
Feel free to reach out with any questions!
Excellent comment. One thing to keep in mind when trying to use FHA to purchase multifamily property, is the property must pass the self-sufficiency test, otherwise the property won't qualify.
75% of the total market rent (aka pro forma) for all the units has to be more than the total monthly mortgage payment. If this metric isn’t met…the borrower can’t use FHA to purchase the property. Here in Miami where we are (and in most of South FL), it's pretty hard to meet that standard. As the Principal Mortgage Broker/Owner of BlackSquire Mortgage, I often remind our loan officer's to tell our clients about this. As for gift funds, it depends on which family member the funds came from. Seasoning requirements for cash deposits vary based on the type of loan. - Rental Property Investor · Port St. Lucie, FL · Member since 2020 · 15 posts · 6 votes3y
Hey Claudine! I see you get with an on fire real estate agent and get to looking for a property 👀 I know one if you’d like
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