Sitting on substantial cash - which REI creative investment strategy to pursue?

[Azurient]

Hello all,

I have been a participant on TheCreativeInvestor.com in the past and I'm familiar with the basics of most creative investment strategies, having participated in some of them (especially hard money lending).

The problem here is that real estate is a very local phenomenon.  An investment strategy that works well in Miami may not work that well in the San Francisco Bay Area and vice versa.  Right now, I'm sitting on a substantial amount of cash and I'm trying to figure out the best way to use it to generate the most income.  

What is the best creative investment strategy to use in the San Francisco Bay Area (more specifically, the East Bay)?  Hard money lending?  Subject To?  Wholesaling?  Buy REO properties and rent them out?  I would prefer Subject To but I'm not sure if that's the optimal strategy in the Bay Area.

Any advice is appreciated.  Thank you.

[John_in_NC]

Well like you said, real estate is local, so YMMV. I too have a substantial amount of cash, after selling a few of my rentals. I am buying and selling foreclosures. Your best bet, at least would be if you were around here, would be to buy these all cash at BIG discounts, like 50% off. To find these takes some work and digging, but it's worth it! There are less newbies with cash these days, (no more HEL's) so, find a property that banks wont lend on, and snag it and fix the problem. Typically it's been vandalized, or buying at the courthouse steps can be hard if your not a cash buyer. It's the most basic way to make money in RE, and the easiest, at least in this part RIGHT NOW. Read every post by fdjake.

Good luck

[redhawk]

X2
redhawk

[Azurient]

Thanks for the info, John_in_NC.  I am leery of putting a huge amount of cash into any single property.  I prefer to spread it across multiple properties.  We're talking about cash outlays of less than $20K per property. 

Anyway, one thing that struck me about the real estate strategies is that many of them depend on the homeowner having equity in their homes.  In today's RE market, many homeowners who want to sell are often upside down.  So strategies such as subject-to and wholesaling probably won't work in today's RE market.  Do you share this assessment?