Posted by jenv on August 07, 2003 at 18:37:33:
Have you invested with them, or own a franchise? If so, I’d be interested in hearing your experiences.
investments that yield higher return? - Posted by JoeYoonDC
Posted by JoeYoonDC on August 05, 2003 at 13:34:46:
-
Putting money into a Fidelity Mutual Fund with 20% ROI of $6000 over a 5 year period is ----> $14929
equals a $9929 netprofit. -
A $28000 condo in Crappyville downtown.
$193 condo fees
Existing tenant pays $500 monthly
20% down = $5600
piti + tax + insurance = $410 roughly
$500 - $410 = cash flow = $90 / mo
It would take 10 years to match the return of the mutual fund.
- Are there any other investment choices that yield a better return than the above two?
I hear that rehab projects are more time consuming and not suitable for beginners.
What are some of the smartest investment choices and easiest for a beginner to get involved in?
Re: investments that yield higher return? - Posted by Jennifer
Posted by Jennifer on August 06, 2003 at 24:51:33:
My first two properties were rehabs, I used a bridge loan with a no season refi. Invested $0 and profited $7,000 on the first and $33,000 on the second. If you have good credit and can find properties at 60-70% LTV it might work for you too depending on the market in your area.
Re: investments that yield higher return? - Posted by ken in sc
Posted by ken in sc on August 05, 2003 at 20:09:02:
Lets take an average house rental. I buy for $70,000. Fix up for $10,000. It now appraises for $100,000. I get a cash out refi at 75% LTV ($75,000), leaving $5,000 invested in this house. This house rents for $1000, but I get no real cash flow as the mortgage payments are $600 and the taxes, insurance, vacancies, maintenance and reserves basically eat up the rest.
Lets say this house only appreciates 2% ($2000)per year, and the mortgage pays down $1000 per year. That is a gain off $3000 on a $5000 investment. 60% - not bad. Not too mention that it is not taxed, in fact I probably have a write off for depreciation.
And like I said, this is an average deal. Most of the time I can cash out all my money, thus getting an infinite return.
Ken
Re: investments that yield higher return? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 05, 2003 at 15:29:18:
JoeYoon–(DC)----------------
There are many investments in real estate that can return 1000% a year and more. However, you can’t get that.
Because you don’t know what you are doing. I just sold a property for about 10 times what I paid for it less than two months ago. Lets see, something like 600% annualized return?
But you can’t get that, because I already bought it and resold it.
What I would suggest is that you read my post for beginners. You can find it by putting “begginers success” into the search function at the top of this main board of this CREONLINE.COM website.
I don’t go into high-return investments there, but I give you my best advice for becoming a successful real estate investor.
Now lets see, the house that I will be getting $275 a month rent on and paid about $2,000 for. What is that? Hmmm something over 100% a year, I guess. Year after year, after year.
I wonder what I will be able to resell the property in Frederick, OK for? I paid about $225 for it. Let’s see two duplexes and a trailer house. Hmmm. Well, I sure hope I can find somebody who wants to pay more than I did for it–maybe closer to the $11K fair market value put upon it by the county assessor? If I can get rid of all those occupants.
Good InvestingRon Starr******
mobile homes and MH notes - Posted by Anne_ND
Posted by Anne_ND on August 05, 2003 at 15:09:22:
Check out the mobile home board.
Anne4
Re: investments that yield higher return? - Posted by Investor
Posted by Investor on August 05, 2003 at 14:54:37:
Factor check cashing/payday loans for 24% annum:
http://www.cashnow.com/cn_invinfo.html
This would probably be higher risk.
Re: investments - Posted by Paul Ness
Posted by Paul Ness on August 05, 2003 at 13:54:50:
I didn’t look too closely at your numbers, but $90 x 12 months = $1,080 net income. Take $1,080 divided by $5,600 = 19.3% annual cash return on your equity investment, not to mention the minimal but additional income tax benefit and any possible appreciation. I don’t know what you used for a loan term, but if you only went 15 years, after the loan is paid off you get a boost in your return. Finally, I don’t even think if you invested $5,600 in a Fidelity Mutual Fund today, you likely are not going to get a 20% return. The 90’s were an unique time in the stock market. Over the long term, I think the average stock return is something like 7%-9%. Go to Fidelity’s web page and look for the best stock fund you can find. Although there may have been 20% returns in the past, look at the negative numbers in recent years (or you can look at my IRA!!!).
Re: investments that yield higher return? - Posted by Joel David
Posted by Joel David on August 05, 2003 at 13:51:08:
Not to be rude but have you gotten 20% back on mutual funds lately…maybe lost 20%. Real Estate gives you the advantage of getting appreciation on lets say $200,000 by only putting up $40k or probably less…thats without being too creative. Would you rather get 3% appreciation on 200,000 or 10% on 40K? You are further ahead with the 3% (in my market lately its but upwards of 5% at least)plus you get the principle paydown and the tax advantages.
Re: investments that yield higher return? - Posted by kgreen
Posted by kgreen on August 05, 2003 at 13:50:01:
How about 24% return on $73,200 in only two months. That is what our current rehab project will net us at closing on the 27th of this month. To me this is a high return on my money.
Re: investments that yield higher return? - Posted by phong
Posted by phong on August 05, 2003 at 13:45:11:
You forgot to take into account, among several things, future appreciation, debt pay down, tax benefits… I don’t think the 20% return is guaranteed for any mutual fund…