Where are you investing $50k

If you had $50k sitting around, which multifamily reit would you park it in today and why? Asking for a friend...

Comments (36)

 
Feb 12, 2021 - 12:28pm

I'd either diversify into high yield dividend and bond funds to get compound interest

Or

(Even though this takes much more work/time) I'd put a down payment on a 30-yr fixed mortgage and buy a multi family rental property in a good area, generate enough cf to pay for the monthly mortgage and expenses and have passive income

Just my 2 cents

 
Feb 12, 2021 - 6:37pm

The latter is much more appealing, just struggling to find the time for it on top of work right now. Also a $50k downpayment doesn't get anything exciting where I live; however, have to remember that just because I wouldn't live somewhere doesn't mean others wouldn't.

 
Feb 12, 2021 - 2:27pm

Small Cap Value stocks and momentum investing historically outperform the market. Right now I think that a large amount of REITs are undervalued. A recent transition that I've made within my portfolio is selling off fixed income due to perceived inflation and investing into "feel good" and "future" stocks. The feel good and future stocks performance have kicked my portfolio's ass in terms of returns and frankly is a good way to ride into the future. For example, I bought about $1k Tesla stock before the pandemic because I believed in the vision (understanding that their financials are pretty shit) and have made a decent return on it. 

For $50k, I would allocate:$15k to Market ETF (VOO), $7.5k to Small Cap Value, $7.5k to Momentum, $10k to select REITS, $3k to "feel good", $2k to select Tech stocks and $5k to YOLO strats

 
Feb 12, 2021 - 6:46pm

Don't disagree with these but wonder if they weren't the play early in the pandemic. Sunbelt markets are now trading at sub 4 caps. Imagine these markets will continue to do well with larger migration trends. Really wondering if it's time to load up on the coastal REITs. Can't see demand not coming back strong when vaccines are all rolled out and we get on top of the pandemic.

 
Feb 12, 2021 - 4:50pm

5.35% dividend yield and has been steadily growing I think. seems like ownership of post offices is fragmented and this REIT has been swallowing up a lot of them quickly since being formed in 2019 but yet only owns about 5% maybe of all of the post offices leased to USPS in the country. seems like there is some runway to keep acquiring these post offices and increase earnings and raise the dividend in this highly specialized area that seems kind of safe with the property being leased to the government. thoughts?

 
  • Associate 1 in RE - Comm
Feb 12, 2021 - 4:54pm

I've been a big believer in BRG's undervalued share price for years. They own in very attractive markets. It's been years since I've done NAV but was excess of $14 using a high 4 / 5 cap. Given cap rates, have dropped dramatically in the South East, I wouldn't be surprised if valuation has increased. Nowadays it feels like things are priced to a low 4 cap. 
 

They pay a 6% dividend to boot. Messy cap structure / governance but very few Multi REITs offering that kind of yield in those kind of attractive markets. Given the smaller cap, think they fly under the radar. 

 
Feb 12, 2021 - 7:36pm

All depends on the type of person you are. What kind of risks you want to take and how patient you are ect.

Though I believe that the long run it the best i would allocate between index, large cap stocks, 1 fund and some crypto. (What I would have done)

 
Feb 13, 2021 - 12:36pm

if you have student loans, pay them, if you don't own a place, use it as a down payment, if you have a place but still own mortgage, pay it, if you paid it out and are feeling adventurous, put it in QQQ, if not adventurous, VTI.

 
Feb 13, 2021 - 6:12pm

you'll pay it down now, you'll have more money available to you for the next market crash, instead of watching your invested money disappearing. plus, piece of mind, if next economic downturn you are to lose your job, you won't have to sell your investments at 50% of initial value just to make a mortgage payment / pay for rent, instead you'll have your house all paid down and don't have to worry.

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