Question for experts. With a small sum -$60, 000 cash, what's the best way to invest this money in real estate

Asked by Rover. Humphrey, Sacramento, CA Mon Apr 6, 2009

My younger sister and her husband are looking to buy a home. They rent an apartment out in Fairfield, (bay area, California.) They have paid off all their debt and now have a small sum of $60, 000 in cash. What would be the wise way to invest and make better use of this money in today’s 2009 real estate market in the bay area, California? They want stay continue staying within the bay area, CA.
1. Should they buy a smaller cheaper home, pay off the rest of the mortgage quickly and then get a new home and rent out the fully paid one for cash-flow?
2. Should they put the entire sum into a down payment for a larger home in the bay area given that prices have come down?
I am aware that this might be a tough question to answer. However, I would be truly grateful and humbly appreciative to hear responses from any experts or folks who have been in similar situations and been successful. Thank you so much!

Help the community by answering this question:

+ web reference
Web reference:


David Tapper, Agent, Burlingame, CA
Mon Apr 6, 2009
Good questions Humprey. It all depends on what your sister wants to do. The best way would be to buy what she can afford, in the best location she can find. The odds are much better that the better areas will appreciate faster when things turn for the better.

Every area has been affected with the recession and credit crisis, especially Fairfield. If your sister decides to stay there, she can buy a home for half of what they were in 2006.

Many investors are buying in places like Vallejo and Oakland and paying cash. That's another option. But I think the best advice would be for your sister to drive around and find out where she would like to live.

Your sister might consider buying a duplex or triplex and renting out the other unit and living in one. This would be a great move because she can get the same financing rates as buying a single family home. Live there until it appreciates, then pull some cash out and buy a single family home.


Dave "Tap" Tapper
Cashin Company
Web Reference:
0 votes
Julie Real E…, , Rancho Cucamonga, CA
Mon Apr 6, 2009
Why not put some into real estate through and FHA loan 3.5% down payment and put some away? Think smart and make smart money moves. I never put all my apples in one basket. I am sure you can find a nice home with a low monthly payment. Good Luck!

Julie Lozano
Prudential California Realty
Rancho Cucamonga, CA 91701
0 votes
Peter Brunton, , San Francisco, CA
Mon Apr 6, 2009
HI Humphrey,

Well, in a perfect world what I would suggest is buying a lower range home and financing it as much as possible (say 20% down). Given this scenario the rent should be able to cover the mortgage payments and other expenses depending on location. Then use the remaining cash to purchase their own mid range home.

However, most likely with 60k this option is unfeasible. So, I would suggest that they put the sum into a larger home. They might as well take advantage of the market and get as much home as possible. Plus they would be able to take advantage of the Federal and California first time home buyer tax credits.

Hope this helps.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more