Real Estate Investment Strategies Amid College Town Challenges

Anthony is exploring investment options due to declining college enrollment impacting Manhattan's real estate market.

### Navigating Real Estate Investments in a Changing Market
* 🏡 The COVID-19 pandemic has significantly impacted the economy of college towns like Manhattan, Kansas, driving **changes in local real estate dynamics**.
* 📉 With declining enrollment rates and an oversupply of new housing complexes, potential investors are feeling **hesitant about the current market conditions**.
* 💰 One strategy for managing excess cash, such as the half million dollars in a checking account, is to **invest in a no-load S&P 500 fund** while waiting for market clarity.
* 🔄 Three potential scenarios could unfold: the market softens, prompting a **shift to other investment vehicles**; a move to a more favorable market like **Kansas City**; or a rebound in the Manhattan market, allowing for **reinvestment**.
* 📊 Dr. John Dolone highlights the dual pressures of the student loan crisis and the shift to online learning, which have **accelerated the demand for traditional college experiences and on-campus living**.
* 🤔 As market conditions evolve, investors may find opportunities to **purchase properties at discounted prices** from sellers in distress.
* 💪 The caller, Anthony, has successfully built a real estate portfolio worth approximately **$1.5 million** and is considering his next steps, demonstrating the **potential for growth even in uncertain times**.
* 📞 Engaging with experts and exploring various investment options is **crucial for making informed decisions** in a fluctuating real estate landscape.

Anthony is in Kansas City. Hi, Anthony. Welcome to the Dave Ramsey Show. How you doing? Great. How can I help? Um, I have about a half million dollars in my checking account, and I have had it in there for a couple of years. I'm trying to figure out exactly what to do with it. My plan was to use it for real estate, but the real estate market's got me a little spooked right now. We live in a college or close to a college town, and uh, the market there, they've built so many brand new complexes in the last 10 years, and nobody's going to college. Okay, I'm with you. Exactly. The enrollment rates are going down. Um, you know, so I'm a little bit leery of that. So, what town are you in? I'm Manhattan, Kansas. Yeah. Okay. All right. Yep, you're far enough away from Kansas City that you're probably not investing in Kansas City, right? Correct. Okay, Anthony, how old are you? I'm 45. Okay, you've done a great job.

yeah, you have. Are you planning to stay in Manhattan? That depends. Um, don't necessarily need to. I have a hobby farm. I'm an electrical contractor by trade, but my real estate holdings. I have a couple rental properties too, but I have about a million and a half in real estate. That's all paid for. Um, about a hundred thousand in cash, 500,000 of my checking [Music], about 400,000 in other assets like track loaders and tractors. And you're a stud. Well done. So proud of you. It's got to feel great, man. I mean, you really did it. And I'm assuming you did all this starting from nothing, correct? I had nothing, inherited nothing. Way to go. Well, here's what I would do if I woke up in your shoes and I find myself in similar situations from time to time. I'm between real estate deals and I need access to the cash when I get ready to do the next real estate deal. That's where I find myself. It's where

you find yourself because you're not going to drop that half million into Manhattan. You've made that decision. I'm not going to recommend. If you listen to me for more than 20 minutes, you know this to be a long-distance landlord. And so what I'm going to end up doing is just parking this probably in like an S&P 500, you know, a no-load fund. There's no commissions and just ride the market with it a little bit while I'm waiting to decide what I'm going to do. And one of two things will happen. One of three things will happen. You decide to stay in Manhattan and the market gets soft as you predict, so you will not pull that money out and buy in Manhattan. So you're probably going to turn and invest it in some other vehicle for probably some mutual funds or something. Number two thing that could happen is you move and you're living in whatever Kansas City and you've got a great market to invest in. Then you pull the money out.

and you invest it then uh what was the third thing that could happen. The third thing could happen would be manhattan bounce back uh the college market firms back up and you feel good about investing in manhattan again. Pull the money out of the s p and invest so you're parking it until something else moves another variable moves in this situation but checking account's not okay. Yeah and I realize that it's been but you know how it is time kind of flies when you're having fun. Well and I'm sure your bank is reaching out blowing up your phone with all their ideas and thoughts are real helpful right now and anthony mr drysdale's on paul mr drysdale's on the line. There's a fourth option you may begin to look at something that gets to be on sale where you've got someone that has to sell or is looking to sell and now you've put yourself in a situation to start to have some conversations about potentially buying. Yeah that that could happen as the market healed.

right in Manhattan. That's right. That somebody couldn't quite survive the turn, and it's making an upward turn, and you're comfortable with it. That could result in a really good purpose, great deal. Yeah, that's a very, very good point. Dr. John Dolone is, you know, one of his three 32 degrees. He's got more degrees than a thermometer in higher ed, and he's talked about with you and I and a bunch of us behind the scenes, and even some of what on the air, that to the extent that because of the student loan debacle and because COVID sent everybody home, and they realized these colleges are trying to charge us just as much sitting at home. I'm not getting like the college experience. I don't see any ivy on the walls here right at my house. So, to those two things hitting together are accelerating the demand for college degrees, on-campus living, college degrees. They're accelerating that demand, dropping, right? It's been dropping. We saw the student

loan. The COVID thing has pushed it over the edge, and so we are seeing some things like he's describing a college town like Manhattan, which is what Kansas State, right? Yep, it's Kansas State. And um, so uh, you know, we're seeing so many smaller towns where the economy is driven by college students. That's right. It's affecting their economies. It really is. There's a lot of those around America.

I have $500,000 in My Account, What Should I Do With It?

The Ramsey Show Highlights

Anthony's Financial Dilemma in Kansas City

Anthony has half a million dollars in his checking account, which he has been holding for a couple of years.

He was initially planning to invest in real estate, but the market's instability and declining college enrollment rates in his town, Manhattan, Kansas, have made him hesitant.

At 45 years old, Anthony is seeking guidance on how to effectively use his savings.

Building Wealth Through Real Estate and Assets

The speaker has a successful financial portfolio, including a hobby farm, rental properties, and paid-off real estate worth $1.

They also have $100,000 in cash, $500,000 in checking, and $400,000 in other assets like equipment.

The speaker started from nothing and emphasizes the importance of having access to cash between real estate deals.

The Impact of COVID and Student Loans on College Demand

The student loan crisis and the shift to remote learning during COVID-19 have led to a decline in demand for college degrees and on-campus living.

This has created a potential opportunity for investment in Manhattan as the market bounces back.

Additionally, there may be opportunities to buy from individuals looking to sell as the market heals.

The Impact of COVID on College Town Economies

The COVID-19 pandemic has intensified economic challenges in college towns, such as Manhattan, Kansas.

These towns are heavily dependent on college students for their economic stability.

The speaker plans to invest in an S&P 500 no-load fund while deciding on their next move, with potential outcomes including staying in Manhattan or moving to a more favorable market for investment.