Strategy game: you have $250,000 cash, GO!

[James Ewing]

Hello all,

Happy and prosperous new year to all! 

Need your help on a strategy game I am playing with myself and our situation: suppose you have USD 250,000 cash you want to invest, what do you do:

1. Buy a property (maybe 2 if funds allow) 100% cash, then finance after rehab and repeat?  Perceived advantage is to reduce purchase price and close quicker.

2. Brrrr multiple SFH/MFH properties (according to a scaling/location strategy), using cash as down payment for finance? Perceived advantage is to maximise the number of doors.

3. Brrrr fewer properties, each with higher unit count, using cash as down payment for finance.  Perceived advantage is also to maximise doors, but reduce common-area maintenance costs, number of deals needed and be a more 'important' client to property managers and contractors.

4. Some other strategy?

A few considerations:

- I am Scottish, my wife is American and we currently live in Italy – investment is fully remote!

- Given above, we are thinking long term rental and not extensive rehab.

- We are educating ourselves, but have no REI experience.

- Target is cash flow of $30,000 and up, per year, after no longer than 2 years.

- Some appreciation can be forgone for cash flow, but appreciation still ideally above 4%

Also, you thoughts on the reasonableness of our target would be appreciated!.

Many thanks and look forward to some interesting answers!

James.

[Zach Lemaster]

@Whitney Hutten

Thanks for the shout out about Rent To Retirement!  I see you are in Boulder, we are very close to you in Lafayette.

@James Ewing

The excellent thing about RE investing is that there are tons of ways to invest.  Taking action to get started in any fashion will give you momentum towards reaching your goals.  It's important to simply be realistic upfront with how much time you have, how involved you want to be, if you want to transition from a more passive to active investor in the future, and what investing method will provide you with the most education & best returns.  These are just some things that are important to consider when deciding on the best path to get started with.  Ultimately I think you will find that you will likely employ multiple strategies over time as you become a more experienced investor.  Main take home point is that you take action, and don't fall into the analysis paralysis trap!  If you have any questions about out of state investing, or purchasing turnkey rentals I'm happy to assist however I can.  Here are a few good resources to read on investor's experiences:

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/518583-feedback-on-renttoretirement-and-zach-lemaster

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review