If you had $500,000

Hi, I’m a newbie. I would like to ask you guys. If you had $500,000 but you can’t use mortgage loans, what would you do? what would be the best way to invest in real estate? Sorry for my poor English skill… Thanks in advance.

I’d keep my $500,000 in my pocket and invest with either other people’s money or use strategies that don’t require large outlays of cash.

It really depends on your market, and how much you want to manage your own properties. If I started with $500k cash, I would buy lower and lower middle income properties at bargain prices.

I’d build a portfolio of subject-to properties, purchase or develop a self storage facility, and do commercial land development.

Thanks everyone :smile

I heard that cash buyers can get properties in cheaper prices, but if you can not use loans, the money will run out one day. Should I do fix and flip to get enough money to buy new property?

My goal is to get a 2 bed 1 bath room in Barcelona for my second house but I don’t want to use all of my money on it. I want to make steady cash flow first.

learn how to invest on a shoe string budget before even thinking about $500,000 being used. if you know what you are doing, that 500k can make you a good bit of money. if you dont, you will lose it.

I am with AJ . I would also keep that money safe for hard times.
Doing business is good when it is done with other peoples money.
Because in property there are less chances to get outlaid!

Thanks a lot. You guys changed my mind. I almost ended up purchasing a $400k condo in NY but now I’m thinking having a foreclosure property under $200k in a growing city like Austin, then I would try to find mortgage lenders who accept the property as collateral.

I’m still wondering whether it would better to buy an apartment in Barcelona without thinking too much because that’s my purpose, my goal but other part of mind is saying it is an unwise act.

I would use that money to buy and flip properties and you could double that money in no time!
Then you could buy a condo or house for yourself free and clear, and still have the $500k to invest and make more money!
Leverage your funds, but use OPM (other’s people money.) :biggrin

Wow… what a great question! Thank you for asking.

I agree with many of the posts on here that you do NOT need money to become a real estate entrepreneur and add value to the marketplace helping buyers and sellers overcome challenges and creatively buy and sell.

I will add one more thing to consider and that is if you are very knowledgeable about your market you might consider becoming a hard money lender. I am sure you can find additional information on that elsewhere on this forum.

All the strategies that are discussed for someone getting started with limited or no cash are all good things to consider. For example, I wrote a long post earlier today about some strategies you might consider using if you were just getting started here:


I think that might also help give you some great ideas.

If you have any other questions or if I can help in any other way, please let me know.

Do a small deal with a pro and learn from them. Go from there.

I’d invest it with a guy like me! No joke!

Kick back and watch the money come in and the portfolio grow!

Since this was a question about what you’d do if YOU had $500,000 are you suggesting that you’d not invest it with yourself but that you find someone else like you instead? :slight_smile:

Hey NSU You mentioned developing self-storage facilities…Is that the new investment hot choice? I’ve seen tons of them go up in my area

Not sure about how hot it is, but once you get one up and running it just seems to be such a safe cash cow. Self storage has the lowest loan default rate of all commercial real estate (8%) compared with loan default rates of between 50-65% for apartments, retail strip centers, and office buildings. Plus it doesn’t have nearly the management headaches of an apartment building (no tenants/toilets, just “stuff”) Not to mention the low operating costs and very high cashflow.

You must understand the risk and justify your decisions with due diligence. As a newbie you should go for cash flow first. You can do flips and riskier deals later as you gain experience and comfort. Partnering with an experienced investor with a solid track record is also a great option.