What would you do with 15,000??

[brian41527]

Ok, I have 15,000 I am wanting to invest. I have two plans, invest in atm machines, or buy a small house for about 40,000, use the 15,000 for down payment and rent it out for about $500 a month. Can anyone give me any advice, are atm's profitable??? What would you do with the money???

[omahacubfan]

I personally would study and familiarize myself with the stock market and invest in something conservative at first.

For example, I recently invested some more into Berk B and am up a cool 12% in about 2 weeks.

I would suggest mutual funds/long-term stocks if you go that route.

I'm not really familiar with the practice of investing in ATMs.

One thing to realize about the house idea is that the $40,000 initial cost is not all that you will incur from purchasing that house. It requires a certain amount of maintenance per month that you will be responsible for as the landlord. Then add on the interest you will incur on your loan while also factoring in the other value considerations (your $15k is worth more now than it will be in 10 years if you still own this property and are still paying it off for some reason).

Also realize that in some states/jurisdictions it might require you to possess a landlord's license of some sort. Factor in background checks, employments checks, ect on your future tenants and this PROBABLY won't be a profitable venture.

[Carlos™]

With that kind of money, I'd invest in my own business.

Lucky dude.

[DerekS]

(your $15k is worth more now than it will be in 10 years if you still own this property and are still paying it off for some reason).

Also realize that in some states/jurisdictions it might require you to possess a landlord's license of some sort. Factor in background checks, employments checks, ect on your future tenants and this PROBABLY won't be a profitable venture.

Inflation is exactly why real estate is a good investment. It tends to come back in to "favor" as inflation increases.

Let's do the math. To buy an investment property with a conventional loan nowadays, you'll need 20% down (assuming you don't have other assets you can borrow against, like more real estate.) So that's $8k of your $15k budget. Figure another 5% in closing costs (which vary by state, type of loan, points paid to buy down the rate, loan origination fees, etc) and you've knocked off another $2k. So you've got $10k tied up, already. That leaves $5k, +/-, for rehab/carrying costs, advertising, etc.

A $32k loan, at 6.5% fixed for 30 years comes out to about $325/mo debt service (assuming $1000/yr property taxes, and $500/yr hazard insurance- both of which I pulled out of my butt and could vary wildly based on your area.)

If you can really rent it out for $500/mo, you're looking at $150+ monthly positive cash flow. Assuming you can manage it yourself and you don't go 6 months without a tenant. Oh yeah, that's also assuming that your tenant actually pays the rent! Figure that there will be hidden maintenance costs and well as rehab/turnover costs. Is the house really turnkey at $40k? In Baltimore, $40k gets you a shell in need of total rehab. But in the midwest, you can probably get a lot more for your money.

I DO NOT RECOMMEND PURCHASING REAL ESTATE THAT YOU AREN'T WITHIN A COUPLE HOURS DRIVE OF. Don't let Carlton Sheets, or Batman, or your third cousin twice removed tell you that it's ok. If you can't drive to it and back inside of half a day, you're setting yourself for disaster.

Keep in mind that a bank won't lend you money on a shell or an unlivable home. They will lend you purchase price plus rehab costs, but the underwriting process is much more strict and the rehab funds are taken in draws, typically.

As for the loan interest- who cares? The tenant is paying it. You also charge them an application fee, so that covers that. You just have to deal with the BS (which may be more costly than the cash outlay, in mental strain.) As for the landlord's license, I've never heard of one. Some jurisdictions require a rental license (which applies to the property, not the owner) and routine inspections, but they're just part of the game. Maybe an LL license exists, but not in my state.

You need to examine the risks/rewards and see if the potential return is worth the outlay. Real estate can be a passive source of income, but it usually takes years of active participation to get the experience under your belt, the network of contractors/agents/inspectors/lenders to make your life easier, etc.

Lastly, you CAN hire a property manager to deal with most of the BS, but that's another 10% off the gross monthly rents, and you've got to shop for a property manager very carefully. Many of them are morons.

Good luck.

[myfayt]

Well break it down to monthly. If you rent out a house for $500 month, you are going to be waiting a few years before you even break even.

With an ATM machine, you get like a $1.50 - $2.50 fee for transactions if they don't belong to your bank. So you might make $20 a day. Still not much.

I would invest in something with more turnaround.

[Gaulkin]

Id buy shares of Ford.

[omahacubfan]

Id buy shares of Ford.

haha why do you suggest Ford?

[Carlos™]

haha why do you suggest Ford?

I think it was a joke, a sarcastic one at that.

[Encrypted]

Ok, I have 15,000 I am wanting to invest. I have two plans, invest in atm machines, or buy a small house for about 40,000, use the 15,000 for down payment and rent it out for about $500 a month. Can anyone give me any advice, are atm's profitable??? What would you do with the money???

I'd buy a house and rent it. You could pay the mortgage with your rent and then some. Your income might be slower than investing it elsewhere, but it's basically guaranteed, unless you can't find anyone to rent it. I assume you could get more than $500/month though, unless it was trash. My parents bought an apartment near the Indiana University - Bloomington campus. My sister lives there and they rent it out to two other students for about $400/month each. It pays for the mortgage. Eventually they're going to sell it and they'll probably end up making money off it.

[Gaulkin]

I think it was a joke, a sarcastic one at that.

Actually its not a joke at all, its still a great investment.

[Encrypted]

Actually its not a joke at all, its still a great investment.

Agreed.. Ford really picked their game up. I'm about to buy shares in GERN in a few days. Won't be too long until they release some positive news. I was in MNKD in roughly November of last year when the stock was at $6/share, now it's at ~$10. I should have held on.

[Bodge4]

A couple of my customers bought ford at around a dollar. I asked them why they didnt tell me about it lol.

Oh the things you could do with $15k

[Encrypted]

A couple of my customers bought ford at around a dollar. I asked them why they didnt tell me about it lol.

Oh the things you could do with $15k

I had about $3k worth of etrade stock when it was at $1.20. I sat with it for about two months and it went no where so I tossed it. About a week after I sold, it spiked to $1.45.. hovered around there for awhile and then eventually hit $1.85. I don't know where it's at now, but I would have been looking at roughly 50% ROI. Then again with Vonage Group (VG) I bought about $800 worth of their stock at $0.40. A week later it spiked to $2. There were sooooo many opportunities in early 2009. I wish I had the money to capitalize. At the time all I had was ~$4,000 so I was trying to hit and run repetitively. It actually worked out rather well for me, but I definitely would have made 3x's more if I threw everything in one or two companies and waited. Now I'm a broke college student with 80% of my money in the stock market.. haha (I only have about $150 cash, so do the math. lol)

[Lambo]

buy a house rent it out and make sure your costs are covered...if you can try to buy a duplex and get double the rent.

or start a small business

[azance]

I'd invest in websites probably. I would try and get some sites with a somewhat steady income and then they'd pay off themselves over time and from then on it's all profit. The hard part is going out and finding the right sites.