I have 350k in cash what should I do now?

Rehabbing & House Flipping
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I have 350k in cash what should I do now?

Jonathan Polanski
Brooklyn, NY · Member since 2017 · 34 posts · 9 votes

Ok BP community, I'm 26 years old, and I recently inherited some money $350,000 to be exact. I'm in school for Finance. I have no income and a credit score of 720. little credit history. I live in NYC (with mom) so there's very little I can do with 350k in Real estate because the market is very expensive here in NYC. I am willing to move to surrounding areas where the market isn't so high. I'm also willing to move to a state or city where I can maximize my opportunity (Florida, Atlanta. etc) there's so many resources online that show you how to make money in Real Estate with no money. But there's people out there like myself who run into money and there's no resources for us. 

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y

@Josh McCullough  I agree with you... money and no experience leads to loss of money most of the time.

If I was him I would get a real estate licesne go work in that industry get a few years of experience learn the terms how real estate actually works then venture into investing..  

I would not respond to those who ask you to do deals with them on line..

just slow down and take it easy out of the gate .. no rush deals are like street cars there is always another one on the next corner.

Podcast Guest on Show #222
JLH Capital Partners51 Review
WebsiteView Page
9Reply
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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    Have you considered HML? That can be a great source of income. Other options are purchase rentals, invest in a REIT, etc.

    3Reply
  • Sunita Maharaj
    Real Estate Agent · St Petersburg Tampa, FL · Member since 2017 · 114 posts · 34 votes
    9y

    Florida is in the top 10 places to invest in Single Family Homes if you'd like to fix and flip, buy and hold, rent etc. and with the use of HM, you can leverage your cash. So you can invest with little or no money out of pocket...

    1Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    9y

    with a HML is it the same as a conventional loan? where you need to have a steady stream of income in order to get approved for the HML? I don't work right now, and I've never conducted a flip. How willing are they to lend me money for my first flip, all i have is 720-750 credit and 350k in cash.

    0Reply
  • Eddie T.
    Rental Property Investor · NY · Member since 2013 · 844 posts · 350 votes
    9y
    Jonathan Polanski if I were you I would move to Florida several good markets to choose from and much more opportunity then in the northeast.
    1Reply
  • Robert P.
    New Bedford, MA · Member since 2015 · 361 posts · 114 votes
    9y

    In my market, you could easily buy a house all cash for less than $150k, put less than $50k into it and sell it for $250K+. No credit needed for this and no source of income needed. Just money...which you have.

    1Reply
  • Antonio A.
    Atlanta, GA · Member since 2017 · 6 posts · 3 votes
    9y
    BK all Day :) Jonathan what do you want to do ? What are your interests ? and the most important of all what do you have time for ? I would consider either investing into a multi-unit or consider being a private lender where you can collect interest on your money. You have a lot of options available to you, again it all boils down to your time availability and what area interests you in real estate. I would seek the consultation of an attorney who handles these types of transactions before making any kind of decisions.
    2Reply
  • Josh McCullough
    Investor · Jackson, GA · Member since 2011 · 228 posts · 126 votes
    9y

    Just spend the next 6-12 months hanging out here, and listening to every investing podcast that you have time for.  Biggerpockets has a great one!  Read books and ask questions.  Learn learn learn, then you'll know what to do!

    Don't go into this without knowledge.  You'll go broke.

    6Reply
  • Dutch Andrews
    Investor · Portsmouth, VA · Member since 2015 · 16 posts · 6 votes
    9y

    diversify.

    put some in safe interest paying less that 50% Loan to Value notes and find an experienced investor to Joint venture the remaining for a higher return, which is a little more risky.

    I invest in Va properties and have done so since 1984. 

    You need experience to mix with your fortunate inheritance. Loosing it would be devastating.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    @Josh McCullough  I agree with you... money and no experience leads to loss of money most of the time.

    If I was him I would get a real estate licesne go work in that industry get a few years of experience learn the terms how real estate actually works then venture into investing..  

    I would not respond to those who ask you to do deals with them on line..

    just slow down and take it easy out of the gate .. no rush deals are like street cars there is always another one on the next corner.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    9Reply
  • Account Closed
    Investor · Canton, GA · Member since 2015 · 88 posts · 63 votes
    8y

    One of the most profitable things you could do with the $350k is invest in commercial storage. You could put the $350k in as an investment either as a lender or as a down payment on a storage facility. You could also put the $350k as a down payment on a multi-family deal or a large portfolio of SFR homes that will cash flow like crazy. Invest in markets that have high cash flow if you want to accumulate a good monthly / annual income. Once you get that going you can apply for more private financing due to your self-employment income being steady. I wouldn't start flipping houses with the $350k because you don't have any income as you noted. You don't want to gamble all your money away on your first flip and potentially lose it without an income stream. Establish the stable income stream first and optimize your taxes via your CPA, then start flipping after you've established emergency funds, and savings.

    0Reply
  • Steve McGovern
    Professional · Lowell, MA · Member since 2014 · 232 posts · 223 votes
    8y
    Very first thing: stop telling people you have money. Second, attend at least about a dozen REIA meetings before you utter those words again. Someone else said to get a license— that’s good advice for short money and moderate effort. It’ll also tell you whether you really like this stuff. There are a hundred thousand things you could do with that cash, up to and including getting a Doctoral degree in Philosophy. Make sure you want it. Congrats on your windfall.
    4Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y
    Jonathan Polanski it is not wise to post how much money you have especially when you are new. You will be a target for a lot of shysters.
    3Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    8y
    Originally posted by @Lane Kawaoka:

    Jonathan Polanski it is not wise to post how much money you have especially when you are new. You will be a target for a lot of shysters.

     Hey Lane thanks I know, this isn't even my real biggerpockets page lol. There's no Jonathan Polanski. I just post under this name so people won't know who I am. I have a general sense of what to do with my money.

    Thanks alot!

    2Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    8y
    Originally posted by @Steve McGovern:

    Very first thing: stop telling people you have money.

    Second, attend at least about a dozen REIA meetings before you utter those words again.

    Someone else said to get a license— that’s good advice for short money and moderate effort. It’ll also tell you whether you really like this stuff.

    There are a hundred thousand things you could do with that cash, up to and including getting a Doctoral degree in Philosophy. Make sure you want it. Congrats on your windfall.

     Hey, thanks I do have a real estate license, i rented a few apts this year in NYC. But Real Estate investing is very different here than other areas. This isn't even my real Biggerpockets page, so scammers are welcomed lol. I'm not taking any business from this page just opinions on what i should do with such a large sum of money. I come from nothing. I'm a first generation black American so this situation is very unusual for someone like myself. 

    I really like this stuff, I read books on investing all of the time. But no book have tools on what to do for people like myself. those who fall into a lot of money at once with no income, and little credit history. 


    I'll keep you posted Steve.

    1Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    8y
    Originally posted by @Jay Hinrichs:

    @Josh McCullough  I agree with you... money and no experience leads to loss of money most of the time.

    If I was him I would get a real estate licesne go work in that industry get a few years of experience learn the terms how real estate actually works then venture into investing..  

    I would not respond to those who ask you to do deals with them on line..

    just slow down and take it easy out of the gate .. no rush deals are like street cars there is always another one on the next corner.

     I like this. 

    Thanks.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    First educate yourself and never ever post how much money you have on here, especially if you’re a newbie. It’s really irrelevant how much money you have besides to yourself and someone you may do business with. All of BP doesn’t need to know that information. Secondly, after you educate yourself I would get stable income and invest in a couple single family rentals or residential multifamily. If this goes well maybe consider going up to a syndication or an apartment building. This whole should take you at least 2 years. 6-12 months of educating and then 1 year of buying 1 or two rentals and seeing how that goes
    0Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    8y
    Originally posted by @Josh McCullough:

    Just spend the next 6-12 months hanging out here, and listening to every investing podcast that you have time for.  Biggerpockets has a great one!  Read books and ask questions.  Learn learn learn, then you'll know what to do!

    Don't go into this without knowledge.  You'll go broke.

     cool, is that how you got started?

    0Reply
  • Troy Sheets
    Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    8y
    Originally posted by @Jonathan Polanski:
    Originally posted by @Steve McGovern:

    Very first thing: stop telling people you have money.

    Second, attend at least about a dozen REIA meetings before you utter those words again.

    Someone else said to get a license— that’s good advice for short money and moderate effort. It’ll also tell you whether you really like this stuff.

    There are a hundred thousand things you could do with that cash, up to and including getting a Doctoral degree in Philosophy. Make sure you want it. Congrats on your windfall.

     Hey, thanks I do have a real estate license, i rented a few apts this year in NYC. But Real Estate investing is very different here than other areas. This isn't even my real Biggerpockets page, so scammers are welcomed lol. I'm not taking any business from this page just opinions on what i should do with such a large sum of money. I come from nothing. I'm a first generation black American so this situation is very unusual for someone like myself. 

    I really like this stuff, I read books on investing all of the time. But no book have tools on what to do for people like myself. those who fall into a lot of money at once with no income, and little credit history. 


    I'll keep you posted Steve.

    Glad to hear you're savvy enough to not put your real identity out there on a post like this. I'd advise doing nothing any time soon with the cash. I'm not qualified to tell you where to park your money in the short term (CD, savings account, etc.) but I'd park it and forget about it for now. Can you work for a developer to gain some exposure? Get paid to learn! Volunteer if you have to.
     

    Can you get involved in a very small way on a deal ($10k-$25k max maybe) so you're in the game but not going to get hurt if it goes belly up? That small bit of exposure will help you determine where your interests lie, show you more of what you need to learn, etc. To do that you'd likely have to look outside the NYC market though. I'm not sure I'd randomly pick a place to move because it's cheaper. Friends or family in an area would be a bonus. 

    I'm also a fan of house hacking, which would be a very safe way to deploy some of that money (again, not likely in NYC). Buy a multi and live in it in a cheaper market? Or buy a multi and rent it out and stay with mom for a while longer till you're more settled on an area? Philadelphia is nice :) 

    Either way, no rash decisions, park it and forget it for now and keep learning. I like whoever above said the 2 year plan; learn for at least a year before you try anything unless it's a house hack or a cheaper multi that will get you some cash flow and get you some experience, both good and bad, to see what you like and dislike. 

    1Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    8y

    @Jonathan Polanski I am all for sticking it into a savings account for 6 months +. Don't spend it and get used to having it. Learn what you need in those 6 months+, in order to invest all of it. Why sit on it for 6 months? Get used to having the money and understanding that it is a normal amount. $350k at 26 seems like a lot of money, but that is not a lot of money and can go quickly if not taken care of properly. 

    For what to do with it. There are plenty of strategies: buy single families, buy multi-family/commercial, buy notes, flip houses, become a Hard money lender, invest in syndication's, etc. The most important part is figuring out who you are and what you're looking for. If you want to passively invest and get monthly cash flow, then investing in other peoples deals and possibly turn-key's are great. If you want to take a more active role, then buying rentals on your own is maybe better for you. If you want to be really involved, then go with finding and buying you own rentals or flips. 

    Good Luck in whatever you choose

    0Reply
  • Ivan BarrattBusiness Member
    Investor · Indianapolis, IN · Member since 2015 · 764 posts · 953 votes
    8y

    @Jonathan Polanski I'll say it one more time for good measure. Keep your money in the bank and get educated. Listen to a little bit about a lot of different re strategies and from there take a deeper dive into subject matter that interests you the most.

    A fool and his money are soon parted so for now pretend like you don't have any!

    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y

    @Jonathan Polanskilol

    0Reply
  • Jonathan Polanski
    OP
    Brooklyn, NY · Member since 2017 · 34 posts · 9 votes
    8y

    thanks guys

    0Reply
  • Dan Gowen
    Rental Property Investor · Pawcatuck, CT · Member since 2017 · 4 posts · 1 vote
    8y
    I like it! Get in the game and start creating momentum
    1Reply
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