How to get things started with 100k?

Question

I’m a Part-Time Realtor Full-Time

Engineer looking to transition into the realestate market either buying, rehabbing, renting and holding or just flipping homes.

Recently,  I sold my house I bought two years ago and completely rehab the property. Came out of the deal with 100k profit not sure where to go from here any recommendations?

Located in the Orlando FL Market

Giuseppe Pavone · Answer

@James Williams I took a similar path and ended up giving up engineering altogether for a career in real estate investing.  Bought a homevestors franchise and am just wholesaling now with plans to add in rehabs down the road.   You've got lots of options with $100k to invest.  Good luck, and if you have any questions I'm happy to help where I can.

David Baier · Answer

@James Williams

Looks like you'll have plenty of options to get started, I'd agree with stretching that cash and buying a few properties with in instead of just one, unless you can find a multiunit building were the numbers make sense. You also have the BRRRR option which would tie up all your capital temporarily but if you buy right and have the right team in place you can get the cash right back and do it again.

Jim Pylman · Answer

@James Williams Run away from the idea of purchasing new builds! That road is definintly not the "highest and best use" of your capital especially living in Florida. You need to be looking into areas where you can deploy your cash and create equity and value that previously was not there. Search and read everything you can on BRRRR and you will learn the unbelievable value that it can create! Happy Investing :)

Trevor Ewen · Answer

@James Williams

If you're serious about going full-time and replacing what is likely a decent salary as an engineer, I would definitely recommend raising some money.

It can be tricky, but most people raise their first extended fund from friends and family. I would start making a list of who is there, what is realistic, and what kind of raise you can expect.

From there, I would look at properties (preferably 6+ units) that fit into the available investment resources. Brrr is great, but still tough from a scale perspective.

Nathan Paul Konyndyk · Answer

@James Williams Open an LLC. Fund it with the money. Put your shingle out and do deals, partner, and go for it as a full-time job. Work to only use leverage, never your principal and see what you can do. Best of luck. You can do it.

Josh Dane · Answer

@James Williams did the profit come from the rehab or just the market uptick? If rehab, duplicate the same effort! Seems like you might have a knack for flips..

James Williams · Answer

Thank you everyone for the advice! after researching I think The brrrr process is the way to go.

James Williams · Answer

@Giuseppe Pavone

Yes, please add me to your list it’s greatly appreciated!

Timothy Howdeshell · Answer

You could simply gift it to me :-D (surprised no one else made that HILARIOUS joke!).

Seriously though, congrats! 100k is a great first deal, and should give you a lot of room to operate. If you're wanting acquire more cash flowing real estate, I agree with @Seth Ferguson. It seems that BRRRR investing, with delayed financing so that you don't need to wait 6 months to refinance, may really be a great strategy.

Depending on how much time you have/want to spend on this, you may want to do your own marketing for deals. Take 20k and spread it out over the course of the next year in marketing. If you get too many deals, you can wholesale them to other investors and recoup some of your marketing costs. Then, you can simply keep the best deals for yourself to do BRRRR investing, or fix-n-flips. If you run out of money, find some private money to take them down.

This is the strategy that I'm working currently; the difference being that I don't have 100k sitting around, and so am fixing and flipping to generate the startup capital.

Best of luck!

James Williams · Answer

Thanks for the feed back! The Orlando market has pretty hot so finding those rehabs have been few and far between with investors paying more than others.

One option i’ve been looking into is buying a few new builds with 20% down on each and turning it into a rental. The new homes are going for $260k. with 20% down on each I should be able to rent it out for $2000-2200. I’ll have around $1,550 in expenses with a $450-550 cashflow. Has anyone had experience with new builds?

How to get things started with 100k?

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