You Have $1M in Cash - How Would You Spend It?

[Christopher Salazar]

This is a hypothetical question which I'm asking because I'm curious how people think. I am in a smaller market in Davenport, IA and surrounding cities also known as the Quad Cities. The total population is around 400,000 people. The median SFR retail purchase price ranges from 80-110K. It is currently a seller's market, with a high demand for quality investment deals. Many of you invest in very similar areas, so this question is for you guys. There are many ways you could answer, so I'm interesting in reading the responses.

How would you invest $1M cash to grow your portfolio as quickly as possible? What systems would you have in place to scale the business? How would you leverage all your assets (tangible and intangible) to build an empire? 

[Brian Cam]

This is just my opinion, but here would be my plan.

I would take 900,000 and spend it on one Apartment complex ( in NY that's pretty much 1 property lol). I would use the 900k as a downpayment for a 2.7 million property.  It would have to cashflow from day 1.  I would improve the property, raise some rents, and use the monthly cashflow (along with the remaining 100k) to fund my fix&flip/wholesale business.

Obviously my master plan is more detailed, but this would be the basics.

[Joe Villeneuve]

First, I would find a different market to invest in.  There is no rule that says you have to invest where you live.  The "limited" logic behind investing where you live is you know that area.  So what.  That knowledge of your area may be telling you, "don't invest here".

Second, you need to put a plan together based on your ultimate financial goals, and wanting to "buy <fill in number here> flips and acquiring <fill in number here> rental per year isn't a plan.  Your plan is based on achieving financial goals (i.e. bills...monthly and total), and the property profiles generated are based on the criteria needed from each property (flip and/or hold) that will help you achieve those goals in the time period desired.

Third, and this is critical, based on your goals, you need to find a market(s) where these properties exist. Then know that market like it was the one you lived in.  Your goals dictate your plan, and your plan dictates your market...not the other way around.

[Anthony Gayden]

Originally posted by @Christopher Salazar:

This is a hypothetical question which I'm asking because I'm curious how people think. I am in a smaller market in Davenport, IA and surrounding cities also known as the Quad Cities. The total population is around 400,000 people. The median SFR retail purchase price ranges from 80-110K. It is currently a seller's market, with a high demand for quality investment deals. Many of you invest in very similar areas, so this question is for you guys. There are many ways you could answer, so I'm interesting in reading the responses.

How would you invest $1M cash to grow your portfolio as quickly as possible? What systems would you have in place to scale the business? How would you leverage all your assets (tangible and intangible) to build an empire? 

Obviously a person who has that much money to spend most likely spent a good deal of time saving and investing to get to that amount. This person most likely owns a business or is in a highly paid career field and probably has an above average knowledge of money management. 

Keeping that in mind I would not think that this person leaps in and spends that entire amount on their first deal. They would probably take a more measured approach, testing the waters on a smaller project to learn the ins and outs of the business and what is required to be successful. 

A better question may be, how do I work my way to having a net worth of $1 million via real estate? Or, how would you go about purchasing $1 million worth of real estate? 

A question like this one really is only for the relative few who are already relatively wealthy. It does not really benefit those of us trying to attain that sort of wealth.