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Updated over 6 years ago, 03/29/2018
Where to invest extra 50K
Hi,
I have 50K extra to invest, and I have already diversified my other investments to many different areas using: Vanguard 3-fund index fund portfolio ( vtsax, vtiax, vwitx (60/30/10) ), M1Finance 3-fund ETF portfolio ( vti, vxus, vteb (60/30/10), individual company stocks and ESPP (around 80K), Treasury notes (6-month and 1-year, total of 40K), I-bonds (10K limit for this year), some CDs (1-year 2% at ally and synchrony), and some in savings account in synchrony.
How can i invest the extra 50K? I can put it into savings account, but return is low. Treasury notes return slightly higher, but not so much. Tax-exempt muni bonds could be, but returns are dropping due to interest rate hikes. Stock market is risky right now, thanks to current politics. Any suggestions here about what i can do with extra 50K? How about real estate funding via Fundrise or Peerstreet? Real estate investment in another state via house flipping or renting? (I'm in bay area, age 33 if it matters.). Haven't put anything in Roth IRA, maybe that? Any other options / suggestions?
Hi @Account Closed, I also live here in the bay area and do out of state real estate investing. With the right team in place, it can be very passive. I have one in michigan and currently putting in an offer on one in Ohio.
It all depends on your goals. For me, I want cash flow to replace my income and long term hold so I can make bigger moves once my properties are all paid off. I seek out of state because its almost impossible to find a cash flowing decent deal here in the bay area even if you go out to Sacramento. If appreciation and quick gains is what you want, invest in the here in the bay for sure. If you want cash flow to replace your current income, I suggest investing out of state. (Slower appreciation, monthly check in the mail like clockwork)
Either way you choose, congrats on all of your hard work. You are ahead of the game for sure.
Just my personal opinion.
Junior
@Junior Soares How did you choose the market you want to invest in if you are looking for cash flow?
@cargi Ozcaglar
Please forget the reits as well, they will not perform well and have not been doing well in a raising rate environment
Originally posted by @Odie Ayaga:
@Account Closed I would say as a beginning note investor that your question on returns is not an easy one to answer and the note industry is not like more popular real estate arenas like buy and hold or flipping where there's more literature and information to find out about it. Learning notes is more like learning a foreign language where the best way to do it is go and live in the country and immerse yourself in the culture. You likely won't have much luck googling the answers you want in notes.
Roughly most active note investors I would guess target returns in the 30% and up neighborhood on non-performing notes. If you're looking at performing the easiest way to think of it as imagine you're the bank on you're on mortgage note (if you have one). At par you're making the state interest rate on the note. At a discount you're higher depending on the discount.
Thank you, this is a good start for me to learn more about performing notes. 30% possible return is awesome, but I'm hearing more about 8-10% return on average.
Originally posted by @Carl Fischer:
@Account Closed
@Dave Van Horn just released a new book on notes. I recommend it highly. It should answer questions and provide new strategies for the experienced as well as the newcomers.
Thank you. I saw his book now. I also saw a lot of videos by him, explaining performing notes.
Originally posted by @Fradel Schaechter:
@Account Closed- good question...
I would recommend discussing this with someone knowledgeable in the area you are most interested in: whether it is IRA, notes, or something else. Being able to have a conversation that takes all your details into account will get you a whole lot smarter and in a better position to decide. Asking the question in a forum will get you many responses and it can make deciding difficult. Choose the one thing you think would be best and talk to an expert in that area.
Good luck!
Thank you. You are right, there are many suggestions from members coming at me right now. I'm familiar with IRA, but I heard about performing notes the first time here. Still, the decision is on me, but performing notes seems to be an area I should be aware of, before making the final decision(s), and funds to place this extra fund.
@Account Closed
If you want to move higher from the standard 8-10% you are hearing consider attending the mid Atlantic Summit in Philly this April 21. Real experts and real note investors from around the country and many from the BP community are already booked. This is not a selling event-If interested check it out on line this code “CRL10” may also provide you a discount- CRL10.
@Carl Fischer glad to hear you'll be at the Summit. Are you presenting? You and Steve Lloyd were the speakers at my first REIA meeting and it's been greatly inspiring in my growth since then.
Sorry if I wasn't clear @Account Closed but 30% is the return that non-performing investors look at. Yes 8-10% is what I would expect on a performing note
Originally posted by @Carl Fischer:
@Account Closed
If you want to move higher from the standard 8-10% you are hearing consider attending the mid Atlantic Summit in Philly this April 21. Real experts and real note investors from around the country and many from the BP community are already booked. This is not a selling event-If interested check it out on line this code “CRL10” may also provide you a discount- CRL10.
Thank you, I didn't know about this event. Most likely I won't be able to make it, because I'm in west coast and didn't plan for this trip in advance. But I will consider attending Mid-Atlantic Summits in the following years. I also hear from several authors hear that I can try non-performing notes, which will return higher than 10%. I will learn more about where I can buy these notes.
Originally posted by @Odie Ayaga:
@Carl Fischer glad to hear you'll be at the Summit. Are you presenting? You and Steve Lloyd were the speakers at my first REIA meeting and it's been greatly inspiring in my growth since then.
Sorry if I wasn't clear @Account Closed but 30% is the return that non-performing investors look at. Yes 8-10% is what I would expect on a performing note
@Odie Ayaga : Thank you for clarification, good to know about non-performing notes and their returns.