In this episode, Bill answers the question, “If I had $100,000 to invest in real estate, how would I do it?” Now, granted, there are many many ways to invest in real estate. However, Bill tackles the question from a rental property cash flow point of view and you may be surprised with the results.
People often ask me “I have this amount or that. If you were me, how would you invest that money in real estate.” Well, first off, I usually say, “I am by no means an expert in ALL things real estate and there many options when you refer to Real Estate Investing” Another common question is, “How much do I need to Invest in Real Estate?” – but that is a question for another episode…
Regarding the question, “how would I invest $100,000,”
I, personally, am a buy ‘n hold investor, specializing in multifamily value-add deals. I create steady streams of cashflow through rental property income. Therefore, I will be answering the question from a rental property investor perspective.
I am investing for passive cash flow income. And I would emphasize the term “passive.”
On the multifamily front, I am looking for a property that is off-market and undervalued that I can add value through re-positioning/upgrades, putting strong management in place, reducing expenses and increasing income. Once the upgrade work is done, I can look forward to a steady source of cashflow income and increased equity.
#1 – I’m trying to create/generate a steady, consistent cash flow from rental properties that will provide long-term income for my retirement years.
#2 – Secondary, I am also trying to help generate funds for our non-profit organization in Haiti (Child Hope International) that aids orphaned, abandoned at at-risk children.
#3 – And finally, I want to create and build a legacy that I can hand down to my children and grandchildren.
So, in answering the question “What would I do with $100,000?” I looked at three options of which I have direct experience and my primary evaluator:
Let’s look a little closer at those options:
PLEASE NOTE: I made the examples simple to illustrate a point and are not real accurate on the specific costs involved. However, I believe the examples are close enough to present an accurate (though not detailed) picture. Below are my assumptions that I roughly (or not) adhered to. If you feel I did not accurately represent the exercise, missed key points or costs, or left something out, please post a comment or write me. I will respond. Thanks.
PLEASE NOTE AGAIN: In the podcast I said there would be an Excel spreadsheet but, after breaking everything down above, I didn’t feel it was necessary. The math is very simple.
I hope this was helpful!
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