Best Way to Invest a Large Lump Sum of Money ($100-$300K)?

[Scott Trench]

Hi BiggerPockets - I am considering writing a lengthy discussion on how to invest a large lump sum of money effectively. This topic comes up for discussion a LOT here on BiggerPockets, as it seems there are many reasons that folks that otherwise save just a few hundred dollars per month suddenly come into tens or hundreds of thousands of dollars (inheritance, sale of a house, divorce, stock options, or good old fashioned luck). 

The goal is to create a resource for folks that receive a sudden infusion of cash. This intended audience earns a median to upper middle-class income. I also assume that a member of the target audience does have the financial capacity to accumulate said amount in a period of less than 5-10 years, meaning that an infusion of cash in the six figure range is a life-changing event.

I *think* I have a plan about what I, Scott Trench, would do if I suddenly came into a large sum of money (much greater than the amount of cash that I currently accumulate on an annual basis) and how I would deploy it in pursuit of financial freedom while working a full-time job. 

But, I'd really like to interview some folks that have done this successfully and hear their stories. I want to create the best resource out there for folks that come into this situation and have the goal of financial freedom at heart. 

So, if you've come into tens or hundreds of thousands of dollars suddenly, and then executed a well thought out plan in deploying that to acquire cash flowing assets that help you move towards financial freedom, I'd like to interview you! Please reply to this thread with your story, or email me at [email protected]. I would also really appreciate the chance to interview you on the phone or via Skype. 

Thanks!

Scott

[Matt Weaver]

I have had this situation come up twice for me in the last couple of years. In December of 2015 I won $100,000 playing fantasy football, I would like to call that skill but it might fall into your plan dumb luck category. At this point I was flipping houses and holding a small rental portfolio ~7 houses, all in my area, while working a 50-60 hour a week job. I had been looking at a very high end flip in a hot section of Richmond VA., with the unexpected cash infusion I went for it and purchased the house which all told took $225,000 to renovate and sold for $640,000, or $294 a square foot. That was a very stressful deal and I learned an enormous amount doing it. I was into that deal for $530,000 and so after the sale of the property I then had $300,000 to use to either continue to flip with or to sink into a buy and hold deal that could generate more passive income, which was my goal. I found 3 quads/4 unit multi family buildings that needed a lot of work and were vacant, it was an off market deal and I only had a few hours to make a decision to purchase them or lose the deal to someone else. I thought they presented me with an opportunity to get the passive income I was looking for and they were in a very desirable area, which I felt would continue to appreciate, while offering a strong value add component, so I offered them $800,000 for the deal and they accepted. The renovations took 6 months, went well over budget, and a lot went wrong, but at the end of the job the properties appraised at $1,600,000. In the interim I had bought a 12 unit apartment complex in Ohio, that was throwing off cash like crazy, when I compared the cash flow to the 12 units I had just finished to the apartment complex it was significant difference. After running the numbers and looking at a lot of deals I realized I could scale up into more units and improve my cash flow considerably. I have now put the buildings here on the market and am actively looking a 24-36 unit complex. The initial money that I fell into has opened a lot of doors for me and given me opportunities that I might not have had otherwise. I have been listening to every podcast and reading everything I can on multi family properties and love the potential they have for passive income. At this point I own 36 units and have the ability to leverage myself into something that will allow me the freedom to leave my day job and put my real estate career front and center, and for that I owe a debut of gratitude to Brandon Marshall, Ryan Fitzpatrick and Deanglo Williams!