Quote from @Alex Deters:
Me and my wife are coming into $1 million here soon. We do not want to "work" full time. If it's even possible, would it be a good idea to buy a multi family, hire a property management company and just sit back and collect cash flow? I don't know if I'm being to vague but I've never invested in real estate but I find it very very interesting.
@Alex Deters as you have read there is many great options given here. Most importantly educate yourself and be careful. That is a great position to be in and if I put myself in that situation here is what I tell all the newer people I discuss real estate with.
1. Definitely search for that house hack multi family if possible. 1-4 you can still get the low down FHA loans to get in cheap and save you money. Typically 2 units will pay part of your mortgage, 3 units can pay most of all expenses and you could live very cheap, 4 units should work out to earn you cash flow eliminating your housing expenses. Having 4 kids ourselves I see how that could be difficult, not possible for my family now but if I could have started out this way I would have and it is very powerful. $1,000,000 unit is only 35K down.
2. I would find the STR market I would want to invest in for higher returns and cash flow to live on. We were just looking in the Orlando market and it is crazy right now but would still cash flow. With you moving to Florida you can easily find a market close enough to manage and learn the business. $500,000 to $1,000,000 STR is $1-200,000 down. The problem you could run into is a STR is typically considered a 2nd home you need the 20% down and are liable for the loan, meaning most banks need to approve your finances. Not having a stable income could be trouble finding the financing. Do your research and you may find a way to get creative for the lending. If bought right this property could generate $5-10,000 month cash flow.
3. I would then find a mid sized 25-75 multi family unit to purchase or become a private investor in a larger deal in the mid west. Depending on the deal I would buy between $1,000,000 and $3,000,000. Down payment $2-600,000. If I purchased this property it could cash flow $2-7,000 per month or more. As a private investor it would be more sit back and passive income, but could reduce to $1,000 to $3,000 per month.
Doing this would diversify me through multiple avenues and limit risk to my monthly cash flow, with limited expenses.
Total down payment could look like $835,000 leaving $165,000 for reserves or first year of living. Living expenses could be minimal to negative, with maximum income potential to $17,000 per month. Depending on lifestyle this could be retirement ready. Continue to reinvest the profits and grow your wealth.
Happy to connect and discuss further if you would like, see if we can help each other.
