Posted by steve on July 07, 2008 at 16:12:58:
so it floats.
Then all you need is an outboard.
half a million to spend what would you invest in? - Posted by Kenneth Hocking
Posted by Kenneth Hocking on July 06, 2008 at 21:03:17:
I was asked this question this weekend and thought it very provocative.
If you were given 500,000 to invest in RE how would you put that money to use and what type of return would you expect to get.
Notes Notes and more notes - Posted by John Behle
Posted by John Behle on July 09, 2008 at 23:35:38:
and then I would buy more notes
Re: half a million to spend ? - Posted by Kristine-CA
Posted by Kristine-CA on July 08, 2008 at 09:35:54:
I would use $500K for 25 down payments of $20K for houses with
purchase prices of $100K, borrowing at 6%, 30 yrs. I would re-sell on
wraps (via all inclusive deeds of trust) for $135-150K at 9%, 30 yrs. In
my markey, relatively easy to get the houses in the right price range,
pretty easy to find buyers with appropriate income.
Math for figuring out returns on investments is still something that
alludes me. That’s the trouble with us flipping types. I just look at
spreads (after costs) or cash flow (after costs). Anyone one want to
figure out the return on the 500K investment for me? 
Kristine
This is the play I would make - Posted by Truth Teller
Posted by Truth Teller on July 07, 2008 at 19:11:23:
500K to spend in RE
300K would be placed in a CD in a Bank in Detroit and I would secure a 600-900K Credit Line to purchase and rehab Homes at 70% or less ltv…that I would sell on land contract near the 219 Zip code area which is about 5-10 minute from the plants just up the freeway.
Average Rehabbed home you would be into for 30K for the nice ones that pull 850-950 on rents/land contract.
So I would have 20 -30 homes (depending on the Line of Credit secured by the 300K Cd)
Using the low end side I would place these homes on a 15 year am at 7.0 Fixed Locked for 5 years.
30,000 each home would have a payment of 270 +taxes and insurance of 150 so I would have 420 PITI and 850 Cashflow or 430 a month * 20 = 8600 a month on a 15 year note I think I will likely rent these.
so 300K in a CD, 200K in Cash, 103K in cashflow In a market others do not want to be in.
with houses that appraise (although few currently sell) at 60K so I will have 600K in equity to boot.
That is my play Se you in MI… it is nice up here right now!
Re: half a million – what would you invest in? - Posted by Natalie-VA
Posted by Natalie-VA on July 07, 2008 at 13:10:02:
I would make hard money loans in my local market at 12% and 5 points. I would expect my average return to be around 15-18 percent since the money wouldn’t be out 100% of the time.
–Natalie
easy - Posted by Celeste-fl
Posted by Celeste-fl on July 07, 2008 at 04:45:07:
25 mobile homes on there own land and sell each one and hold the note.25-30% return
If it all has to be in RE my answer - Posted by Rich-CA
Posted by Rich-CA on July 06, 2008 at 21:45:42:
is different than if I can choose the vehicle.
I just bought into an REIT that has an annual dividend in excess of 9% (they raised it to 9.5% this year). I would consider further TIC and REIT type investments for part of the funds.
I would also look at smaller apartment buildings (or one opportunity to buy 50 condos out of a complex having 300+ that came up a short while ago). I would also be looking at smaller strip malls/office buildings as well as those small business buildings where each business has a large roll up garage door and attached office area (a lot of new businesses get their start in places like this).
Basically, I like unique or rare kinds of opportunities where there is a demand but the lemmings have not yet piled on to reduce the returns.
For a return, I would look at 8 - 20% annually depending on the nature of the property. I should note that the REIT and TIC vehicles invest in all these kinds of things but on a larger, more diversified scale than I could accomplish with only %500k to invest.
My best investments to date have been a technology venture capital fund (after 4 years it has produced a 100% net profit yet has only invested half what we put into the fund) and some RE that we sold at the peak of the market here in CA.
what would you invest in? - Posted by Killer Joe
Posted by Killer Joe on July 06, 2008 at 21:20:11:
Well…
If you invested the money in a multi-unit building near mass transit in the Washington, DC area…
AND
You wrote a letter to every new Congress person and Senator that gets elected this Novemeber telling them about your property, you wouldn’t have to worry about any vacancy factor.
They have to bring new staff members with them in droves.
I sure wouldn’t expect a return to small government, if that’s what you’re asking.
Know what I mean?
KJ
not sure you could get 25 80%ltv loans - Posted by Truth Teller
Posted by Truth Teller on July 08, 2008 at 12:21:44:
In this market Commercial Loan guidelines are better play short term
just my thoughts
Good idea… question… - Posted by JT-IN
Posted by JT-IN on July 07, 2008 at 05:12:13:
Where are you buying MH’s with land for 20K each…?
So you are saying that you would amortize the 20K at 650 mo over 60 months to obtain the 30% yield…? (Or possibly a higher purchase price and a lower int rate to achieve the same return %; 30K @ 12% int, for 60 months,).
Or, if not, what other terms or numbers would you propose…?
Re: If it all has to be in RE my answer - Posted by brandoncbsre
Posted by brandoncbsre on July 08, 2008 at 05:13:11:
I just bought into Caplease (LSE) the yield was right around 9.6% when I bought 2 months ago. Now the stock is down nearly 20%.
At least with my real estate I dont think about the value everyday. I am buying cashflows and nothing but for the couple of years.
Re: Good idea… question… - Posted by Celeste-fl
Posted by Celeste-fl on July 07, 2008 at 06:36:26:
About a hour west of tampa. I,m buying them for 20k and there worth 40k and re-selling them in the high 40,s at 12% for 15 years. I have done 10 and it is working real nice.
I bought cashflows in Phoenix - Posted by Rich-CA
Posted by Rich-CA on July 08, 2008 at 11:25:49:
We were clearing $300 per house per month until the end of 2004 when the bottom dropped out of the rental market and we went negative. Had to do some portfolio rebalancing, but acted quickly enough to get back to a no net loss situation.
In my opinion, the biggest advantage of the REIT/TIC investment is that (1) its very diversified as to market and type of property and (2) you don’t own the actual RE so you don’t have to get rid of it at “motivated seller” prices if your projections turned out to be overly optimistic or something unforseen happens.
Re: Good idea… question… - Posted by Eric in FL
Posted by Eric in FL on July 07, 2008 at 10:50:50:
Not to be a turd but they must be water proof or floating if they are an hour west of Tampa!!! I’m sure you are talking about Polk and Sumter county.
Best Regards,
Eric
How do you turn a MH into a houseboat??? - Posted by Ed in Idaho
Posted by Ed in Idaho on July 07, 2008 at 13:42:57:
Just stay in it during the next hurricane!
water front on all 4 sides - Posted by steve
Posted by steve on July 07, 2008 at 13:27:33:
good catch
Re: Good idea… question… - Posted by celeste-fl
Posted by celeste-fl on July 07, 2008 at 12:45:01:
Pasco county,Ok one hour north west.Its all good.