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I'd be tempted into doing an STR (maybe with a higher down payment to ensure cashflow, just run ROI numbers) or an apartment complex - I personally wouldn't mess w/ small stuff. Even developing a mobile home park, affordable townhomes or self storage.
A "miserable corporate job to no where" isn't all that bad - health insurance benefits, 401k matching, probably some sort of discount stock purchase plan, stability, lenders like it. Sounds like she has a good W2.
Netting 30k/month isn't a small feat - especially without putting in consistent work. You really need a business or a commercial asset in my opinion - contractor bays, oil change type centers -something that everyone uses. Think if one house grosses 1k/month, then it may net say $500/month (after maintenance/repairs, CapEx). You're asking for 30k month - that's 60 of those houses...in a few years. Not saying it's impossible, but that is a full fledged business. You really need an infrastructure to run something like that - systems, people...and you have to keep it going.
Also - if you invest that 500k in an S&P 500 tracker - you'll average 8%/year - 40k. Not too shabby for literally 0 work or thought.
I would also take a look at your expenses - 15k/month in Michigan? Is it really that HCOL of an area? 15k/month = 180k/year. FIRE would essentially be pulling 4% a year so she needs around 4.5mm. The two of you together at 30k/month = 9mm. I think you'll need some time to get to that number, honestly.
The other serious honest question you have to ask yourself (you're wanting in invest a lot of capital - and your sister's at that) - how successful have you been in RE? What do your yearly numbers look like? What's your overall ROI and cashflow? Have you been more or less successful than you predicted? Why?
I find it ironic how people categorize their no where corporate job then say that job has created this wealth for them and security.. Also I find it kind of humerus were 15 years ago when i joined BP the FI number was 5k to many up to 10k now its 15k and up.. ( which is realistic in my mind I never thought 5k was realistic. Getting to 30k or more a month on NET NET cash flow takes a boat load of capital or you need to be in the transactional side of the industry.
Sitting on a college degree of software development, I concur. I started investing my savings because I couldnt find a decent job, now it pays annually what I would have made in software development. Although, in time, it will vastly out perform. Glad I got started young.
Do you have any thoughts on asset type that you'd like to share?
That will wholly depend on you and your financial philosophy/strategy. My question for you is what are you looking to get out of life right now, what are your intentions with the money? If you do not have a baseline set for yourself you can be entering into dangerous uncharted waters. 500k is a lot of money, you might be like a ship of the line thats lost its rudder if you arent carful.
Taking a certain degree of humility with my following post here, as that is a decent bit of money:
1) be disciplined in your approach and have a solid intention for what you want to do with your funds
2)examine your life, as Socrates said.. know thyself. what excites you and what are you lacking? This will determine what you have the most joy doing, investing your money should feel fun and exciting, success is suppose to feel good not stressful!
3) How can you achieve your well intended goal and hit your mark in a measurable and diligent way?
4) assuming you have these questions answered... what I would do with that money is the following
-find a good market, work with someone who knows that market very well
-pick an asset class, manufactured, single famliy, multifamily, commercial, industrial
-based on your well intended financial goal, decide if you want immediate returns growing your warchest of funds, or if you want long term cashflow.
There are pros and cons to everything. Holding an asset long term... well people have a lot of finance talk about appreciation, unrealized gains, equity.. a lot of that is true and valid. But in the real world, your money is gone and you get a building, or in your case.. quite a few buildings. This will cost money to maintain, cost money to manage leasers, subject you to the will of tenants/leasers should they damage something, should someone get injured, your money will be gone (for now), subject you to the will of the market, interest rates, potential market volatilities.. you will need a lawyer at that amount for sure and a good CPA.
If you get in and get out with lets say, land, or new construction, or flips or something where your money is deployed in a much shorter duration.. you will still be subject to the whims of the market place but because the duration your funds are deployed and because you arent concerning yourself with tenants theoretically there is 'less risk'. Even then, there is still some stuff to manage. Like contractors, which can be ROUGH especially for someone with a day job who cant be on site beginning and end of shift.
My best advice to you, partner with someone who knows their market and has a solid game plan.
