Great post and great debate! This is very timely for me.
I have invested in real estate and have flipped 10 properties in my career. I have been meeting with and interviewing financial advisors over the last few weeks because I have a pretty good chunk of cash that I’m looking to invest somewhere.
The options are pretty simple.
1. Invest the cash in a diversified portfolio of stocks and bonds and hope to get a good rate of return over the next 15-20 years.
2. Use the cash to buy rental properties.
There are a few different ways that I’m looking to implement strategy #2.
One is to use the cash to buy as much as I can free and clear. Probably 5 to 7 properties.
Another would be to buy 2 or 3 outrightvthen leverage 4 or 5 at 50%. This would give me 6-8 properties.
The last would be to leverage them all at 50% which should give me about 10 properties.
If I did implement any of the strategies involving leverage the goal would be to pay them off as quick as possible with the rental income.
Obviously, a lot of the work would be done upfront in acquiring and fixing the properties. But I know if I do it right this income can become very passive involving only a few hours per week.
Putting your money in the stock market and sitting back and watching it grow sounds great but quite honestly it makes me nervous. There are too many factors that are completely out of my control I could affect my nest egg.
I just listened to today’s podcast with @JoshDaniels and it was really good. I’m looking to do something similar to him. Not looking to own 100 units but if I can generate some good income from 10-15 properties that’s all I need.
