Quote from @Donny Frusciante:
Hello,
We recently sold our house and made a net of around 160k...we now have a contract on a new house and I am trying to figure out how I should finance this new house. Is it recommended to put 160k down on the new house and just have a lower monthly payment with a 15 year loan or should I do 0 down and somehow invest that extra 160k? I can afford the house with 0 down, so that won't be an issue.
As of today, I just have the 160k sitting in a wealthfront account accruing 4.55% interest, which currently brings in about $550 a month.
btw--I have no idea about investing! I simply use the autoinvest robot on wealthfront and just hope it makes good decisions...yes, I know, I need to better educate myself on how to do these things myself!
Please help me make the best decision in order to build my wealth and thank you in advance!
With out the any real estate knowledge, and doing something you might regret, you should find someone that has years of experience in real estate that will be willing to equally go in on a deal with you. That way you will at least gain knowledge along the way. It's important that you find someone that will put their own capital in the deal to assure they aren't just taking your money and squandering it away. That being said, you'll need to be able to know how to vet, our find someone that can look at their numbers for you. Either you look at their returns our have someone do it for you that you trust and that can understand the history. If you do it yourself, you'll need to understand things like cash on cash return, understanding cash flow, equity, depreciation, etc.....
Another option is to put your money in the S&P 500 which had an average return of 7% the last 5yrs. Then you can take the time to gain knowledge on real estate, find a strategy that you are comfortable with, write out a plan, and when you're ready, pull out of the S&P and execute your real estate plan.
