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Updated over 3 years ago on . Most recent reply

User Stats

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Nathan Faucett
Pro Member
  • Rental Property Investor
  • Greensboro, NC
63
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99
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How to Grow My Money While Build Up for the Next Deal

Nathan Faucett
Pro Member
  • Rental Property Investor
  • Greensboro, NC
Posted

My wife and I started learning about real estate in January of 2019.

In June of 2019 we purchased our first primary residence and converted the basement into an 2 bed/1 bath apartment which we started renting out in August of 2020. This property generates $900 of rental income monthly, which almost pays our mortgage and allowed us to start saving up for our next deal.

In April 2021, we purchased our first rental property. It is a 3 bed/2 bath single family home with a 1 bed/1 bath ADU. When renovations are complete, This property will cash flow $750 monthly, which is a home run first deal for us if everything goes according to plan. While we intend on refinancing this property this year, we believe that we won't be able to pull 100% of our cash out of this deal, which is okay for us, but just means that we aren't going to be able to roll right into our next deal.

So theoretically we should be generating $1650/monthly that will eventually go into investing into our next property.

My question is this - what would you do with that money while you allow it to build? Would you find a high interest savings account and let it sit there? Would you find a total market index fund and let it follow the market for 12-24 months? Would you invest in a REIT?

Just looking for ways to make my money work for me while I am waiting for my next opportunity.

  • Nathan Faucett
  • Most Popular Reply

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    Jaron Walling
    Pro Member
    • Rental Property Investor
    • Indianapolis, IN
    3,809
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    4,133
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    Jaron Walling
    Pro Member
    • Rental Property Investor
    • Indianapolis, IN
    Replied

    @Nathan Faucett Congrats on the success with investing. It sounds like your approach and speed for REI is very sustainable.

    I have a similar issue holding money right now. Savings accounts suck and so do CDs. The interest rates are so low right now it's a joke. It was just a few years ago I was holding cash in 15 month CD at 5% interest; today my bank is offering a 0.5% on the same term. I decided to stick most of my money into the stock market. Wish I would have dumped more into it after the pandemic scare. I'm investing in ETF's and utilities companies. I like high dividend paying stocks but it doesn't make much money. 

    Inflation is going to hurt all of us if the government keeps printing money. It's already killing would-be home buyers since the institutional buyers are grabbing everything up. I agree with James to shift investments towards a 50/50 split. I should probably focus on that my self. Having some liquid funds for a future DEAL is the smart move if you ask me. 

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