170K how to allocate

I have 170k liquid, I need to buy a primary home ($250k), 2 used cars (25k for both) and I would like to buy a long term or short term rental unit. I’ve seen units going anywhere from 50k - 120k. Should I. Up a resort condo near Disney and do the short term vacation rentals or buy something up North and rent long term. As for money allocation. Am thinking 50 k down on primary home, 5k down and finance cars at 3%. And the remainder for an investment unit or the units. I have steady income and excellent credit score. What should I buy?

Ok I got my advice from a friend who is much smarter than I. Here is what he said to do and I’m following it. He’s a millionair 20% down on a home, finance the rest, finance two new cars (not used) and forget about the rental. Sit om the 100k cash.

Your friend is 100% right. Only, why stop at only two cars? It’s very difficult to impress the neighbors with only a couple toys. I’d at least by a jet ski and a boat. All financed of course.

Use the cash to splurge on vacations.


I love Luke's sense of humor! 

A $250k home with conventional financing will cost you $55k down which includes closing cost’s!

You don’t say what you earn but I am assuming it is sufficient to afford a $200k mortgage?
Do you have any other debt? I am thinking about your debt to income ratio?
Can you afford the car payments with your current position?

Do you have a prudent reserve already put aside in cash, in case of an emergency?

Should have at least $30k for six months in living expenses!

Your mortgage lenders are probable going to want to see a reserve outside of purchase money!
This amount will be specified by your lender?

From a vacancy standpoint your better off with a couple of duplexes or a four unit as three rented
unit’s probable covers your monthly cost’s and the fourth provides reserves and some profit.


If you sit on a $100K cash, secretly stashed away in your couch or bed, you’re never going to be a millionaire like your friend. If you put it in the bank, what are you getting, 1% a year interest? Don’t think that that and your JOB(Just-Over-Broke) will get you into the millionaire’s club either–usually you never save enough and it never does.

Did your friend became a millionaire by winning the lottery or an inheritance? For the other 99% of the population, sitting on on their money isn’t going to get you in the millionaire’s club.

Also, invest in something you love to do. Otherwise, you’re going to get bored of it quickly and end up loosing a sizeable chunk of your investment on exit.

If you love rentals, put a downpayment on something larger like a 12-20 plex that will give you a good monthly return on your investment plus equity appreciation that will eventually make you a millionaire. If you don’t want to get your hands dirty in real estate, stick it in REITs or tax lien certificates. There’s REITs out there paying 10%+ if you really look.

Millionaires are a dime a dozen. And that’s barely enough to insure.

Obviously, somebody died and left you some money. Otherwise, you wouldn’t accept advice that says “buy a house, a couple cars, and sit on a $100k.” I mean, seriously?

If you want to become a millionaire, you’ve got another $830,000 more to go, after taxes. Which probably means another $1.5M pre-tax.

You were on the right track about buying income property, and the wrong track about buying new cars and a house, and putting 20% down.

Put your consumer debt and pride on hold for a few years, until you actually have something to blow on consumer debt and pride. That is, keep driving the beater Buick and the sunburned Saturn, until you have a half-million in the bank. Then you can splurge on new upholstery for the Buick, and run the Saturn through Earl Schieb. Meantime, you cannot possibly put more into maintaining your current vehicles than you’d lose on new cars. Cars are pride-inducing, expensive, consumer liabilities, and the less consumer liability you make of them, the faster you’ll become a millionaire.

I have a different take on the house. I believe you should own the best one you can afford, but leverage the crap out of the financing. Then park your beaters proudly in the driveway. Meanwhile, why would you put 20% down, when you can put 3% down? If you get in trouble, which bank is gonna be slower to foreclose? The bank with a 20% equity cushion? Or the bank that will break its teeth trying to take your house from you? Be wise. Make sure you’re always in the position of ‘caring less’ what happens.

Or do like I did. I found a seller that was walking away from their four bedroom, executive home. I offered to make the seller’s loan payments, if he gave me his deed. He agreed. It cost me exactly the recording and transfer taxes to own this home. A home that never showed up on my credit; was never listed as collateral for anything; and required no qualifying to buy.

When you can afford a nicer house, add the old one to your portfolio of rental units, and let the renters continue to pay off your loan(s).

At the same time, go find a small, under-performing income property. Learn how to turn it around, clean it up, manage renters, track expenses, and otherwise get your landlord on. Soon, you’ll rinse and repeat the process, without the mistakes, and begin making sophisticated, profitable decisions regarding your subsequent income property acquisitions, and within no time at all become a millionaire.

Before you know it, you’ll be worth several million, and your millionaire ‘friend’ will be asking you for advice, while you take him on a tour of your properties in your old Buick.

I like your advice. I was taken back by my “friends” advice. I was putting 20% down on my primary home to avoid PMI. I am getting used cars instead of new cars. I sold a house in Seattle and the $170 is my proceeds. Good bye WA state, hello Florida

Buy and sell houses!!!1