What can I do with $60k?

Question

I have $60k.

Should I use this money to pay off current mortgage that generate $1500 rental income a month or should I use 60k as down-payment on a rural home, fix and flip?

Thanks

Whitney Hutten · Answer

@Julie J. First, I would take the $60K and ensure your financial position is fortified.  Make sure your consumer debt is eliminated, have 6+ months of reserves in the bank (including all deductibles for home, auto, health, disability), then I'd start investing!

I agree, what are your goals?  Do you want to grow a portfolio?  If yes, then I would purchase property using other people's money and put a great tenant in those properties to pay them down.  You could also start flipping, but note, this is an instable time to start doing that (read J Scott's book on Recession Proof Real Estate).  You could start BRRRRing and have flip as an exit (kill two birds with one stone). Then take those proceeds from the flips and feed that into buy and holds.

Investing in another house-hack is a great way too to put that money to use... start eliminating your housing bill.

However you start your business, make sure that you purchase a product that is simple to work with and easy to move.  For me it's 3/1 or 3/2 ranches with a garage...

Corby Goade · Answer

If you are able to house hack, you could do really well with $60k in many expanding mid-sized markets. You could do a BRRRR deal in my market with $60k and create $20-40k in equity pretty quickly, then churn that equity in to another similar deal and leave a trail of rentals in your wake.

James G. · Answer

@Julie J. This is really going to depend on your goals. Do you want to take on more risk and grow more quickly? Use the 60k to purchase another property (or two). Do you want to be more conservative and sleep better at night, but grow slowly? Use the 60k to pay down your mortgage. It all comes down to personal goals and risk tolerance.

Guifre Mora · Answer

Julie, it will take you 3.33 years to generate 60K from 1500 monthly. 60K can probably give you good returns if applied correctly. I can't give you an opinion on investing in rural property.

Caleb Heimsoth · Answer

@Julie J. Give me the 60k and I’ll spend, I mean “invest” it for you