If you had 500K for a Real Estate Investment, what would you do with it?

Buy the entire city of Detroit

And pocket the other 400 grand

Not sure about the US, but over here, I'd invest in rural areas with a big sized house with barns, and a huge terrain for agriculture.

Solid investment - either for me or for late sale.

Purchase 2 properties beside each other. Close you can to CBD.

I have had this dilemma too and here is what I decided...

It's not exactly what you buy that is important. As long as it has rental potential and is creating a cashflow, you are good to go.

The key is buying it at the right price - finding that property that fits your personality and goals AND finding that motivated buyer that will give it to you for under the fair market price so that you have equity off the bat.

I would try to split your money into 3 sections...

180K each gives you about 3 piles...

pile 1 - cash
pile 2 - stocks and bonds (evenly split)... try to get a 5-10% yield on that $180K or about $15K per year - give or take

pile 3 - RE investment base

now in pile 3, you should buy a property if you can for half of that price and then improve the property and improve the cashflow...

So if you bought a commercial building for 100K and then had 80K to make improvements, add units finish renovations... you have a $180K invested in an improved property. Let's say you can earn a net income on the investment of $12,000 before the renovations and now with new units and better common areas, you can earn $20K per year... now you add $20K+$15 and you have $35K income plus 180K cash to make additional investments. If you work full time, you can save this $35K for 5 years and have another 180K in cash saved up to buy additional properties.

Things not to do;

Don't buy SFH in speculative areas with other homes for sale around it.

Don't mortgage yourself

Don't get greedy - you can live well forever on $500K if you don't get greedy.

Be patient... it took me 5 years to find the right property but once you own it, you own it forever until you decide to sell it.

Factor in other expenses you don't see such as insurance, property taxes, maintenance, and overall condition issues.

Buying properties with repairs allows you to negotiate a better deal up front... if you get it for say $90K and only need to put in $25K, then you have 115K total and 65K extra to put back into your investments...

Could it be flipped within 6 months? Have one in many mind?

Don't want to hold the investment.

Thank you by the way.

Buyfarmlandand start a house in the back with walls.

Zou leuk stoansech int noordn.

Bazooka for a pool... Wauw.

Good you said you didn't want to hold the investment, that's important information.

You don't want rental property that generates a cash income long term?

How much renovation are you willing to undertake?

Buy Detroit.

Never invest more than you are willing to lose on real estate. I.e, always be ready to hit the road when the SHTF.

Oh, oops too late :(

give it to me

I have two stories about people that I know who've made a lot of money since 2008.

1. A software developer. His software was worth 200k in the US.
He moved to The Phillipines and sold each user their copy for 50k a piece 10 times.

In the Phillipines, that's 7 million dollars.

2. A college coach was fired for recruiting black athletes.
He took his money, moved to Cambodia and bought a rubber tree farm. Now he's raking in the dough.

What about your story - you want to have to move to another country and learn a new language? Do you have a knack for programming?

You can't buy a home without the intent of holding it... you make a huge gamble otherwise... you should never buy an RE investment if you are not prepared to rent it out and hold it for a long term gain...

Build the portfolio as another leg of your income - so like you have retirement income, re income, investment income and your job/business income...

No getting rich quick son - you know this - I made a bit in the last 5 years but keeping it is the hard part trust me - and the government is wiser and wiser for it...

Take your time man trust me... dont' look to others, make your own story and make money doing what you know best.

Also, don't believe the hype - making a lot of money can have it's headaches too if you do it wrong or if you get involved with people that you end up hating...

multiple streams of income... i would even take 25K of that and find a start up you can finance and get equity from it as a way to have a 'speculative' investment... but be wise about who and what you invest in because once it's gone, it's gone...

^^^^^ ^^^^^


Start an "organic" fish farm

Last Edited by Angelic_Warrior on 08/04/2013 09:40 AM

Yep. Do not tunnel vision in on real estate as your only consideration for investing/making money. Especially agree with "multiple streams of income". And "i would even take 25K of that and find a start up you can finance and get equity from it as a way to have a 'speculative' investment" is a great idea.

There are opportunities out there, but you are not going to find them on the GLP.

You're going to be taxed to death on RE in the future.

Beware of debt too. IR's will go up and up -- how's about 15% per annum?

asshole

Rates can't go up too fast or the economy will be destroyed - taxes can't go up because of assessors limitations... i just had my property taxes reduced.

15% interest rates would mean we'd have to have more employment of better full time jobs and the 1 in 3 living with mommy and daddy will have to come out of hiding.

I doubt rates will rise dramatically in the next 20 years - unless there is unprecedented war... in which case all bets are off.

I know exactly what I would do with it, but I'm not going to tell anybody because I'm going to do it one day.

Either cashflow real estate, IE as many small rental properties for 500k you can get.

You might be able to buy a small apartment building for 500k with maybe 4 - 6 apartments in it which rent for a few hundred dollars a month.

I guess 1000-2000 per month for the combined rents for the entire building.

OR

Buy a small peice of land with outbuildings and turn the land into either a fruit plantation for producing jars of organic jams or small scale beer brewing.

-



Here in the UK £ 500k would buy me about 6x 3 bedroom houses that rent for 400-500 Pounds a month. So it would bring in at most about 3 grand a month before expenses.

3 grand a month for 500k isnt bad.

I already have properties that I hold. Commercial. Houses. Apartments. I would hold if the properties are within 3 hours drivetime from me.

I'd buy silver. It's put in a bottom and will soon run to $50. No guts no glory!

I'd never blow that much money.

Just buy a motorhome.

I really think the economy is about to implode.

Which could make any investment in real estate a sure loser.

Might be better off to buy $500,000 worth of silver dimes and sit on them.

keep it in my pocket

let's wait and see what real estate is left standing first, eh?

why do you think we are on the verge of implosion? The world has been reset many times.

If you have re holdings and 500K cash - i would just park it and cashflow... dont' let it burn a hole in your pocket.

3 hours is too far too - you should be no further than 45 minutes if you own a rental unit in order to be able to go there without plans at the drop of a hat.

learn how property notes work and trade with them , you can make 30%returns if you know what to look for. Drenx is a good place to start. Also we are seeing the beginning of another pump and dump in real estate. you have 2-4 years to get in and get out before the next dump. that said there is great money to be made right now but only in the short term. That is probably the most important info you need to know when real estate investing today. contact me if you want to know more [email protected]

If you are seriously asking glp for advice about this...my advice is let a grown up handle your pretend 500k