You successfully bought into your property and held it long enough to sell it for a profit. The next step is to figure out what to do with the extra money you’ve now been able to put aside. Everyone has their opinion but you really need to break it down into four main categories.
Starting with rent or buy, the big question of where you are going to live next? For some this question is already solved based on a variety of circumstances. However, the majority of people who sell their primary property need to either buy a new one or rent one. The main question there is how the market is doing. If it is too expensive you may want to rent. Renting affords you flexibility in that if the market goes down in a year or two you can buy back in. As you can see, your next step may be a key in determining how you will invest in your next property.
Commercial investing is considered somewhat risky unless you are working with a great rep. Consider looking for a realtor who specializes in that area and can assist you. The key to commercial property is to be able to sustain the cost of the property with zero renters for at least a year or two. That is why it’s considered a risky investment because it may take time to find the right business and client.
The markets are a funny way to invest your money. It seems the longer you wait, the more money you get and panic selling never works. The same could be said in real estate but there usually is more stability and predictability in the market. This is also an area where you are better off putting your money in the hands of a professional.
Your friends are great people, but for whatever reason they have not been as fortunate in the real estate investing game as you have. With that extra cash and your primary residence covered, your friends may be an ideal partner. Now, the first response to that is that you never do business with your friends because it makes everything personal. That is true. However, this is different. You are not renting a house to your friends. Your friends are selecting your house with your approval of course, they are buying it using your money as a down payment and you are all on the deed. You put down the down payment and they cover the mortgage. Their ownership in the home means they care about it and there is less pressure of the renter and client relationship. It puts less pressure on the friendship and both parties want the best. Imagine putting $100,000 down on a property for your friend or family member and they pay the mortgage, they add the pool, they get the house painted and put a new roof on it?
The best advice anyone with money can be given is to remember to protect it. You can invest but invest carefully, always with an expert and never put all your eggs in one basket.