What to do with $100,000

[Gpooch]

I've come into some $$$ and would like to invest $100,000.  Aside from my house, I'm new to real estate investing.  Is renting better then flipping and where are the best places to invest?  Thank you in advance.

Gpooch   :-*

[cayenne]

Hi! I can tell you that in my market area (southside chicago) there are a great number of investors seeking short term, most  often same day financing on properties they are looking to buy. You could loan acquisition money to purchase the property and on the same day these investors will acquire a mortgage(2nd) closing to pay you your initial investment plus interest! So you can in effect become the bank for a day. Good luck to you!

[Swirlaze]

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[evergreen]

My advice is this. Put it in a money market, FOR NOW.

Sit back, take a breath, and relax. Don't be in a rush to pull the trigger. Many fortunes have been lost this way. I can tell you that when people know you have money, they come out of the woodwork. I know this guy who has a friend...

Next up, read read read. Educate YOURSELF. Don't rely on so-called "professionals". If they knew half the stuff they tout, they would not be working for others. There, I said it.

You can put your money to "work" tomorrow or one year from now and if you are smart, it will return properly. Jump and make a bad move, well you got the idea.

Real Estate is the way to go, but you need to be informed and educated.

[reoconsultants]

What state are you in? I personally would look into tax liens until you figure out what you really want to do with your money! They are safe secure and there is good intrest involved (notice I did not say great) I know here in colorado some counties pay up to 13.5% there are a ton of ways to make $$$ off of your $$$ do some research and do what is right for you really check out your market and think about what you want to do.

[Gpooch]

I appreciate all the good advice!  A distant cousin with no family passed and left the $$$ to me because of her fondness towards my young daughter.  I live in NJ (Bergen Co.) which has been on fire in the last couple years.  When $$$ like that comes along, especially when you're not used to having more then a paycheck, it can be intimidating.  I am ambitious, but cautious.  Being patient is always good advice.
Naturally, I would like the $$ to grow, tax liens sound interesting.  Out of state sounds good too but wouldn't it be wise to invest near where I live?
All responses are very much appreciated.

[reoconsultants]

Gpooch

     Tax liens are just secure. That is why I like them houses can be great as well, I personally did a little of everything now I do a whole lot of nothing! As far as that goes I like to tell people really think about what works best for you! Would you like being a landlord?
do you really want to fix and flip? how long is the average house on the market where you live? What is that 100k house going to be worth in five years? how far below market can you find them to make it worth your time? just some thoughts! its all in your hands! I personaly have made a great amount in all areas of investing! Every area has its pros and cons! That money is just not doing much in the bank at 2.5% if your lucky! there is so much to look at and good luck to you Robb

[evergreen]

where are good 100k houses? I only ask because I am in Vegas and there is no such thing. :D

As to Tax Liens, while they are secure, you can buy bad liens--or so I have been informed.

About the money amount, patience is important. I know someone who was not used to having much. She ended up leaving her job of 20 years and had around $125k coming from profit sharing.

Result a little later? No money left, nothing really to show for it, and working paycheck to paycheck again. Very sad.

Treat your $100k, like it is your last paycheck. Don't see 100k sitting there and start getting "loose" with your money. Few dollars here and few there add up. Every dollar counts.

[Swirlaze]

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[tedjr]

Howdy Evergreen:

I am closing on a house tomorrow that I bought for $16,500. I will spend a few grand on paint and carpet and rent it for $500 per month or maybe sell it with owner financing. I got a loan for $20,000 which includes points, closing costs, and the fix up. I will have a few grand out of pocket still. I can not imagine your market with the high prices. The house I bought is north of Austin about an hour. I have others there too and am looking for more.

LOL

[kdhastedt]

Evergreen,

Ted (as usual) is right on the money...there are lots of places that your money will go farther than Vegas, California, NY, Washington, DC, etc...

I moved here (NW Louisiana) last summer from the DC area.  If you follow these boards at all you know that DC is another overheated market.  Stuff goes on the market and sells in 1-4 days for over the already over-inflated asking price -- it's crazy.

Right now, in the database that I use (taking in just two parishes), there are 490 properties listed under $100K.  There are 202 under $50K.  Some of these properties are REAL junkers but some of them have 'potential'.  I've bought 2 so far -- a 2BR/1Ba HUD home for $51K and a 3 BR/1Ba for $57K.  I get strong cashflow from both properties.  There is a large Air Force base here as well as a half dozen casinos providing a near-endless stream of renters.

Keith

[spo70]

Very good advice...

My advice is this. Put it in a money market, FOR NOW.

Sit back, take a breath, and relax. Don't be in a rush to pull the trigger. Many fortunes have been lost this way. I can tell you that when people know you have money, they come out of the woodwork. I know this guy who has a friend...

Next up, read read read. Educate YOURSELF. Don't rely on so-called "professionals". If they knew half the stuff they tout, they would not be working for others. There, I said it.

You can put your money to "work" tomorrow or one year from now and if you are smart, it will return properly. Jump and make a bad move, well you got the idea.

Real Estate is the way to go, but you need to be informed and educated.

[evergreen]

3 - Can you go on a little more? What do you mean quitting her 20 year job and getting $125k profit sharing? Why would she do that in the first place? Why did she have to get a job again?? I mean, how did she spend all of it?

She left her job because it was at an older casino here in Vegas and she was getting older, husband doing ok, etc. She has bad spending habits and was someone who lived paycheck to paycheck, like so many do. Thus, the money she got was wasted on all the material things she wanted at the time. Crap that has no real value and only depreciates.

Most people don't think and plan too well. So $200 at Target, $100 at Walmart, $450 at Best Buy, and so forth does not seem like a big deal until enough time passes and you find yourself on your last few thousand and nothing to show for it.

The same can happen for over anxious investors-to-be. You finally get a lump sum and know you need to put it to work. You think that if you wait a few months or more that you will miss the "gravy train". So, you rush out and throw it down on what others tell you to do. Sometimes it works out ok, most of the time money is lost.

As to homes, I was just curious. Las Vegas is still a value in my opinion--based on where it is going in the coming years. I can't imagine buying a home that is a fix-it-uper. I am not a handy man--Mr. White Collar--so I don't know if it would be financially viable for me.

As to renting homes out, that is something I have not tried yet. Seems like it would be a nightmare.

[proppurty]

Hey Gpooch!Fellow Bergen Countyer here.For now follow evergreen's advice and just hold it in cash.I am a commercial real estate developer and my mother is my broker and my sister is my property attorney and we are all holding cash waiting for these overpriced $600,000 one bedroom condos in Fort Lee and 1.5 million dollar 3 bedroom single family houses in Englewood Cliffs to start bottoming soon.
Stay in the vulture position with cash in hand and wait for the bubble to start bursting pretty soon and you will be able to steal these at rockbottom prices soon enough.If you bought today and you rented it out,you'd have significant negative cash flow,the price/rent ratio is like 400-500 to 1 in our market, and when the prices start down,your mortgage will be a $400,000 mortgage for a $100,000 property soon.
I have $300,000 in cash,$60,000 of it in 600 $100 bills in a safety deposit box,but the rest in 3 month New Zealand dollar CDs with Everbank which pay 5.64% interest and it rolls over and compounds every 3 months.No bank in NJ will give better than 2-3%.
Don't follow the herd here and let them try to outbid each other on the properties here.They will regret winning the bidding war.Just swoop in and snap them up when this area's bubble starts to deflate.Then rent them for a positive cash flow and hold until they go back up.

[Gpooch]

Proppurty:
Do you think that there will be a bursting of the bubble in the Bergen Co. area?  I think that this area should remain consistant, maybe flatline a bit but no burst.  Homes here are ridiculously inflated but I would be surprised to see a crash.  Like to know your thoughts.  Thanks for the great advice.

Gpooch  :