If you had 300k to invest right now what would you do?

Question

I feel like turnkey would be the easiest to quickly get cashflow and expand the portfolio. But I fear that it wouldn't be fast enough. Multifamily would allow you to invest more at once, but they are flying off the shelves right now. What would you do?

Jonathan Twombly · Answer

My honest answer is that you should study the markets and do nothing right now.  Because bargains are coming for those who are patient.

We're in a period of great flux, where no one really knows where things are headed and everyone is taking a cautious approach, including lenders.  That won't end just because the economy opens up again, because what we're going to see is that economic activity is still depressed - from a combination of the businesses that have already failed and the remaining caution about going into crowded places.  The only question is the degree of lost economic activity, not that economic activity will be lost.

Right now, we are in a situation where no one can accurately forecast, meaning everyone imagines the worst-case scenario.  As a prudent investor, you basically have to imagine that at this stage, because we lack adequate information.  This alone will cause prices to drop.  And it's already happened.  Green Street Advisors already notes that prices on its Commercial Property Price Index have dropped 10% across the board.

So, the point is - wait and see.  We are very early in this yet.  Three months into the Great Financial Crisis, most people were denying there was anything wrong with the economy at all, and to the extent there was, there would be a quick bounce-back.  It's always human nature to think so.  And it's always in the government's interest to tell you everything is going to be okay.

Brian Garrett · Answer

I’d buy a commercial (5+ unit) value add multifamily building, reposition it, stabilize it and then either sell and do a 1031 exchange to trade up to a larger multifamily or refinance and hold for cash flow depending on the numbers.

Alyssa Dyer · Answer

@Charlie Haa

I see a lot of out of state investors buy properties that purchase cash-flowing properties at the 60-80k range is our more typical C class areas (think older suburbia). These are "almost turn-key" opportunities in that they generally already have a tenant in place and they're performing, but because they haven't been fully flipped you will have more maintenance along the way. That said, as long as you factor in maintenance and it still performs, you might as well buy at a purchase price of 30k less than a true turnkey!

Noah Chappell · Answer

@Andrew Hogan few ideas...

First, given the profound effect of the crisis on retail, I personally wouldn't touch a NNN at this time.. at the 300k price point a NNN commercial property would likely be in a strip mall district, etc, with pure non paying tenants.

Some parts of the country have remained remarkably stable in prices, like where I am in Hennepin County, but others such as parts of NJ have suffered. Even if you're in a stable area, you could probably take advantage of fear of unknown & obtain a low market or below price before we find out what really will transpire.

As always & especially now, key is to buy 20% or more below market & choose a "recession resistant" asset class. Anything commercial or A class I'd avoid. Under market c+/b- in a good, stable market are likely to do very well.

Paul Moore wrote a recent article describing some recession resistant assets & areas:

https://www.biggerpockets.com/...

Good luck.

CJ M. · Answer

@Charlie Haa

The reality is the information in your post is so limited, that nobody on here can give you the right advice because they don't know all of your goals, risk tolerance, timeline, etc.

Chris Seveney · Answer

I have $300k+ right now and I am buying non performing and performing first position mortgages. We are starting to see additional supply from some companies that may have liquidity issues or are stressed which is allowing us to buy at a little better discount than usual.

This type of investing is not for someone right out of the gate as their are a lot of complexities but I a great way to earn cash flow

Steve S. · Answer

The right Opportunity Zone Fund is the way to go. weallascend.com is an OZF that is solving the homeless problem and providing great returns

Steve Kontos · Answer

@Charlie Haa

That's something that is determined by your specific financial situation.  There are great opportunities right now you just need to see what makes the most sense.

I have been investing in multi-family apartments and it has worked well for my situation.  Cash flow and appreciation are the two pillars required for my specific goals.  Best of luck!

Alina Trigub · Answer

@Charlie Haa

Now is a great time to educate yourself. Study various investment vehicles and asset classes to decide what is best in your specific case. By the time the bargains start showing up you will be ready to buy!

Here're a few posts to get your education started:

https://www.biggerpockets.com/member-blogs/10850/87253-should-i-scale-my-investment-from-single-family-homes-to-multifamily

https://www.biggerpockets.com/member-blogs/10850/86621-six-steps-approach-to-getting-started-in-real-estateReach out if you have further questions.

James Storey · Answer

@Deniz Eker NNN stands for triple net or absolute net (net of expenses) and it is a lease structure where the tenant is responsible for taxes, insurance, utilities, maintenance, as well as capital items such as roof, HVAC, and parking lot replacements. The landlord has no responsibilities and simply collects a check for rent.

James Storey, CCIM

If you had 300k to invest right now what would you do?

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