Two things to point out. First, never reveal in public (like on the internet) how much money you have available; doing so will attract all sorts of unsavory types who will try to separate you from that money. Second, don't "spend" the money, instead "invest" your money. And do so wisely.

Tony, Welcome to BP. Spending $300k is easy. Ask you wife and she will show you how. If she doesn't know how, well, I'll have my wife help you out. Invest it to make decent returns is another topic. A condo in the city, or a house in the suburb? In our area, when you buy a house for $1M today and you change your mind tomorrow, you can confidently put it back on the market and re-sell it right away. Of course, you will lose money due to transaction fees and costs. In the mid-west where people buy properties for cash-flow, not so much. It's almost a guarantee that you will not sell it for the price you bought when you buy it from a TK provider. Everything comes down to desirability. Something is cheap for a reason, and so is something expensive. @Johnson H. and @Jay Y. are hosting a local monthly meet-up in North San Jose next Friday. Join us if you can. It's free, and I will buy you Nachos and drinks if you come early, say before 7ish. You're on your own next month because I'm out of discount vouchers. We have had over 20 members everytime. Some came from SF, Livermore, Monterey, Los Gatos, Oakland, etc. so you're quite close relatively speaking. Many of us invest both locally and out-of-state. Come and exchange some ideas. Let's help each other succeed. http://www.biggerpockets.com/forums/521/topics/144...

I can say what I'd do with 300K cash to invest.Chop it up 3 ways, 100K a piece, and use it as down payment to buy 3 properties each worth 500K. At that price range we are talking about condos in less pricey bits of Bay Area (no Palo Alto) or small houses in "up and coming areas" like east San Jose. You will be cash-flow neutral or even slightly positive, but appreciation will make you a millionaire in a hurry.

There is zero reason for CA investors to go out of state. I admit I have been tempted. For Bay Area folks that's what Central Valley is for. Anytime you feel the urge to buy cheap houses for say 100K a piece take a look at towns up and down along Hwy 99. Stockton, Fresno, Bakersfield etc. We are building High Speed Rail there, investing 70B worth of infrastructure to connect Central Valley to the coast. Pretty huge upside if you asked me. :)

@Joe Villeneuve I know why they go out of state.. but they need to choose very very carefully. They also have a different perspective they expect their purchase to go up in value. and save some very select markets in the so called cash flow markets the assets never rise in value and if they buy from a TK provider they probably over paid by 10 to 30% right out of the gate. the GRASS is not GREENER over the hill.. what you get usually is investors that can't afford CA but they just got to have some real estate like the Simon and Garfunkle song "I have some real estate in ( your pocket).. but they just don't know what they don't know.. and get sucked into buying in dead and dying areas because they think they are going to retire at a couple hundred a month positive cash flow. So what goes through their mind is hey if I can just get 20 or 30 of these I can make 5k a month or more and in 30 years they will be paid for then I am making 20k a month.Fast forward to reality.. by the time they buy 2 or 3 and the PM rips them off the tenants don't pay the tenants trash their units they give up then they try to sell. and of course sine they bought from a Turn Key provider and paid far over market they lose 20 to 50% selling and you never hear form them again especially on BP.There was a post a little while back the poster asked anyone to post their success rate if they had owned mid west upper rust best TK for more than ten years how have they done.you got a bunch of local guys defending their market but not a one actual investor. There are good cash flow markets but one needs to be VERY VERY careful..

@Tony T. @Skyler Smith Skyler Tony is in Foster city 300k is a down payment .. there might be some very tiny condo's that are 300k I know I brokered a few in the late 80s that were 120k so maybe they only appreciated to 300k.. But where Tony lives he is talking down payment for a home to live in. And as we all know the Bay Area is not a prime buy and hold cash flow market its more appreciation driven... @Tony T. jmartin and others have had success buying income properties in the east bay Oakland and Richmond specifically. Also Tony be careful not to get suckered into out of state investing. You must choose very very carefully the RE market out of the WEST coast is another animal completely. With much of it very nice but if you choose poorly you will be separated from your money.

@Tony T. Everything posted here is correct. Bottom line is, the bottom line. It depends on so many factors, not the least of which is what you ultimately are looking for in the way of returns. Start with that, work you way "backwards", through market analysis, until you see what markets fit your ultimate "exit" criteria.Then you can decide how to, as @Steve Babiak so aptly said, "invest" your money.Joe VilleneuveREcapSystemA2REIC

you're definitely getting some good (though varied) advice here. My 2c:1- I wouldn't worry about 'revealing' the $300k. In the Bay Area it's a nice start towards investing, but that's about it. As Account Closed myself, etc. go to meet ups. 3- invest close to you! You know your area well and can easily manage the property. I'd want to stay with 30-40 miles. (Actually I'm spoiled, I stay within 2 miles of where I invest :). Trust me, it's much easier. 4- lg vs small home is probably a bit off. A lg home will probably be out of the immediate Bay Area. Appreciation will most likely be better in the core. But what I would consider is 2-4 units vs a smaller SFH. You just have to look at properties, their locations, the rents, etc. etc. to better understand this. 5- in SF condos can be great. In Bay Area suburbs, maybe not so much, as they are usually less desire able than SFH...unless you're on university ave in palo alto or something...and than it's SF prices. 6- IMO your real calculus shoud be between 2-4 vs SFH. Ru single? Own a home already? Willing to live in the investment prop? If yes to last Q, why not buy 2-4, move into the smallest one and collect rent. It's a great stepping stone to buying again in a few years with your banked appreciation and consequent refi/pull cash out. That's how people get rich around here.

@Amit M. ,Yes, everything is 50/50. He moved there in February of this year. The cost of living is cheaper in Brazil. He and his wife are currently renting a 4-bedroom house there for $1,150/month. Their health insurance is $350/month. He made $6k renting out rooms using Airbnb during the World Cup. He's always thinking of ways to make money. Everytime, he was thinking of getting a job, the people there would stop him. He's looking into buying land and building houses there. Cost of land acquisition is $20k-$25k. Construction cost is around $65k-$70k for a 2,000 sq.ft. house. You can sell them for $150k. It takes about 4-6 months to build a house. That is his assignment for now. We will get a private lender in the U.S. to fund the deal. The profit will be split. Not sure how that will be structured yet.Although I'm not retired, I don't have a real job. Gasp!!! I'm making decent money syndicating deals and referring business. The cash-flow from the rentals is paying for most of our living expenses. Wife's salary is helping out the in-law parents' living expenses. Right now, it's $1,500/month, but will by $2,500/month next year. My income is going back into investments. The money I make from miscellaneous stuff is going into my daughter's stock investment account. Believe or not, it's over $25k YTD for her and still counting. People pay me very generous for my time when I help them out. @J Martin and about 20 other BP members met my wife and daughter. When J asked my wife what I do, she said I don't do anything. LOL!!! That's the story of my life.

wow. SoCal is a different world.Meh, a measly 300k....Where you live is not really considered an investment, it's an expense. living in a small house will reduce expenses and increase cashflow. But you have to live somewhere. Once youve decided, look at rent vs own calculations, but be wary of buying tulips. Now, with a portfolio of rentals in the real world, assuming a 25% equity and a nice performing portfolio, that should get you... say, .... 60k a year net? maybe more. You could use that to rent in socal...

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Updated over 10 years ago, 09/03/2014

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Tony T.Poster

Foster City, CA

Real Estate Deal Analysis & Advice

How to spend $300k

Tony T.Poster

Foster City, CA

Posted August 29, 2014 22:56

I've got about $300k to spend on a home that offers capital appreciation along with some decent rental income (not expecting it to necessarily cash flow).

Does it make sense to buy a larger house in the suburbs or a smaller home (or townhouse/condo) in the city? Let's say both options would yield the SAME capital appreciation. Does it make sense to buy a smaller home or condo?? My assumption is that with a small home or condo...there are fewer potential repairs compared to a large suburban home. Does this hold water? Or should I be thinking beyond this?

Thanks for helping me think through this.

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