Invest in STR or My Business?

[Account Closed]

I’m having such a dilemma. I have had a desire to invest in real estate particularly STR’s for years. I finally got down to analyzing deals, working with a realtor, etc. but I’m having a hard time investing in an STR when I know the returns I get from investing in more product in my business is exponentially more and quicker turnaround. For context, my business does about 10-12 million a year and is only in year 5 so ton of room to grow still. I have about $1M liquid currently but wouldn’t want to invest more than $200k on a property. And I know 200k doesn’t mean much especially when it’s just sitting currently. However, I feel I could try to find other ways to put that money back in my company somehow instead of real estate since it’d take years to see a real return.

I hope I’m making sense and really hoping someone can help me think through this. I love real estate I just don’t see how, outside of simply diversifying, that it’d be worth it. Any thoughts / advice would be helpful

[JD Martin]

Quote from @Account Closed:

I’m having such a dilemma. I have had a desire to invest in real estate particularly STR’s for years. I finally got down to analyzing deals, working with a realtor, etc. but I’m having a hard time investing in an STR when I know the returns I get from investing in more product in my business is exponentially more and quicker turnaround. For context, my business does about 10-12 million a year and is only in year 5 so ton of room to grow still. I have about $1M liquid currently but wouldn’t want to invest more than $200k on a property. And I know 200k doesn’t mean much especially when it’s just sitting currently. However, I feel I could try to find other ways to put that money back in my company somehow instead of real estate since it’d take years to see a real return.

I hope I’m making sense and really hoping someone can help me think through this. I love real estate I just don’t see how, outside of simply diversifying, that it’d be worth it. Any thoughts / advice would be helpful

 Without knowing anything about your business, just based on your post I'd put the money in the business. RE ends up being more about parking money sometimes than growing money exponentially. I'm not saying you can't make any money in RE - I certainly did - but if you really want to grow money and have a business doing that well, why would you want to sink $200k into something you don't know a whole lot about. Diversifying just for the sake of diversifying doesn't make a whole lot of sense. It sounds like you know your business, so you should probably do that.