Author Topic: Best place to keep money while waiting for real estate opportunities  (Read 790 times)

BradminOxt19

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We have about $500k in cash we'd like to keep somewhat liquid in case we have real estate buying opportunities in the next 2-3 years.

Right now the properties are priced too high, and risk in being a landlord due to eviction moratorium.

What's the best place to park $500k to gain a decent amount of interest / dividends for 2- 3 years that won't be volatile and impacted by real estate dips / increases so we can move it quickly to real estate if real estate should dive?

Fishindude

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Re: Best place to keep money while waiting for real estate opportunities
« Reply #1 on: January 14, 2021, 08:28:47 AM »
What's the best place to park $500k to gain a decent amount of interest / dividends for 2- 3 years that won't be volatile and impacted by real estate dips / increases so we can move it quickly to real estate if real estate should dive?

I am unaware of any such magical place that currently exists.
If you want it to be safe and readily accessible you are pretty limited to things like CD's or a money market savings account, neither of which will generate much income.

Cb1234567

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Re: Best place to keep money while waiting for real estate opportunities
« Reply #2 on: January 21, 2021, 10:41:34 AM »
Are you looking for a response like, buy Disney? :) Dividends generally come at a cost, so why not straight market investments without dividends?

If you need the money available where you will not have a loss, it doesn’t exist. Anything touting guaranteed good interest (whatever that means to you) has a risk associated with it.

As you are noticing: The beauty of a low interest rate environment is that it’s cheap to borrow money (if you’re into that). The curse is that everywhere you put your money pays diddly-squat. Banks make money no matter what, of course.

We know many people who are very heavy on cash (savings or money market account), who are waiting for the shoe to drop in their market of choice. For this reason, anecdotally, we expect any market dip/“correction” to be short-lived, whether real estate or mutual fund investments. FWIW.
« Last Edit: January 21, 2021, 01:18:59 PM by Cb1234567 »

srad

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Re: Best place to keep money while waiting for real estate opportunities
« Reply #3 on: January 21, 2021, 11:38:13 AM »
Are you looking to buy investment property or your primary?

I ask because what happens if prices don't come down in 2 to 3 years and now that primary home is 50k more?  If you think 2010 prices are coming back, you are going to have a long time to wait... Not to mention, interest rates are so low right now you should want to lock in as many 30 year fixed as you can.   

To me, the best time to buy is when you run across a deal that makes sense.  And having the cash on hand it makes it that much easier to pull the trigger.

Now, to answer your question on if there was a magical place to put your money, there are companies out there like IronBridge Lending.  You give them money, they lend it and you are in 1st position.  You get a 6% yield and you can redeem your money with a 30 day notice.  The risk of course is if there is another total collapse of the real estate market, then your money is all gone.  I haven't put any of my money in there, but i keep thinking i should give them 50k to try it out.