The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: studlyrs on May 10, 2016, 03:17:30 PM
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Signing papers tomorrow on my previous residence that I used as a rental the last 2.5 years. I didn't like being a landlord and the market was up so I sold the house. Eight offers on the first day on the market. Now I have 50k in my pocket to invest. IRA is maxed out, not sure what direction I will go.
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Are you looking to replicate the sort of cash flow that came from a rental? You're probably wanting something high-dividend, like REITS, then.
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Could look at peer street or vs tax
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What I would do:
Down payment on $250K multifamily in an area with better rental economics. Put under management, get checks.
What you should do:
Whatever suits your needs and preferences best. If you want something 100% passive, buy ETF shares.
Could look at peer street
Only for accredited investors at this time, right?
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I don't blame you for getting out of the landlording business; I've been there.
What to do with the proceeds of the sale? I wouldn't want to make any specific recommendations without knowing a lot more about your situation. Do you have a set asset allocation and/or an IPS (http://www.physicianonfire.com/you-need-an-investor-policy-statement/)?
Is your emergency fund in place? Debts to pay off? Do you have a taxable account? Kids? 529 accounts?
If you've got all your ducks in a row and have nowhere else to go with the money, I would fund a taxable account, and invest in accordance with your desired asset allocation, applying it across all retirement and non-retirement accounts.
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I've always thought a good solution to this sort of prob is to max contribute to yer 401k (if available and if there's still room) and use your excess cash to offset the lower take home. I haven't really seen this option be pushed by anyone so maybe I'm missing something... Of course you want to do something with the rest of it, but you could at least get some into a tax deferred account since your IRA is maxed.
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Signing papers tomorrow on my previous residence that I used as a rental the last 2.5 years. I didn't like being a landlord and the market was up so I sold the house. Eight offers on the first day on the market. Now I have 50k in my pocket to invest. IRA is maxed out, not sure what direction I will go.
You could take $25,000, buy my commercial property off me, then let me buy it back off you over 3 years for $1000 a month.
You'll make $11,000 in 3 years, and if I default, you can just sell the property on eBay (is a 9 acre, 17,000 sqft building I paid $50,000 for)
This kind of explains it better:
http://forum.mrmoneymustache.com/investor-alley/selling-a-property-and-buying-it-back-over-time/
I'm trying to figure out the ROI on my deal, but it seems huge compared to stocks. Since you start getting paid back after the first month, you basically have your investment back 2 years in - and even though you got your whole investment back, you still have ~50k in collateral.
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I took my 52K from the apartment I sold and put it into Vanguard Total Stock Market ETF. One big bolus transaction. I will admit that earlier this year I felt like an idiot for selling the place when the market dropped and wondered if the sellers "Knew something I didn't."
If you don't like landlording then don't do it. I had the same issue.
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Is the $50k taxable from a gain on the property?
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I would suggest the full index at Vanguard and be done with it. You could also dollar cost average it in if you wish. And you could spread some to bonds or reit if you feel the need.
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I don't blame you for getting out of the landlording business; I've been there.
What to do with the proceeds of the sale? I wouldn't want to make any specific recommendations without knowing a lot more about your situation. Do you have a set asset allocation and/or an IPS (http://www.physicianonfire.com/you-need-an-investor-policy-statement/)?
I do in my head...
Is your emergency fund in place? Debts to pay off? Do you have a taxable account? Kids? 529 accounts?
Year of emergency funds in bank, no debt, small taxable account right now. One kid, no plan set up yet.
If you've got all your ducks in a row and have nowhere else to go with the money, I would fund a taxable account, and invest in accordance with your desired asset allocation, applying it across all retirement and non-retirement accounts.
Probably the direction I will go.
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Is the $50k taxable from a gain on the property?
Nope, lived in it two of the past 5 years.