Re: I dont think that is comparable… - Posted by John Sheridan
Posted by John Sheridan on August 26, 2005 at 12:55:05:
Yes I am aware of the “apples to oranges” aspect, and my question was more rhetorical than anything else. Mostly, I was trying to make the point that he is looking to quadruple his net wealth in just 8 years, and to point out what it takes to do that.
Also I don’t think it’s axiomatic that the “returns are much greater” just because it’s operated as a business. Every stock I buy represents a business, and if they could easily make 19% per year then that’s what stock investors would get, right? But I know of few businesses that can turn that kind of profit on a consistent basis. Also remember, leverage can work against you as well as for you.
19% is a pittance compared to what most mobile home investors get. When I started out doing Lonnie deals I gave my investors half of my profits for fronting 100% of the money I needed to do a deal.
After a while I decided giving them yields of 50%-80% was unneccesary. Then I offered them a straight 18% regardless of my yield. Now we’re down to 9-12%.
The only issue here is we’re talking about small amounts of money to do Lonnie deals- so to take $250K to $1M in 8 years would require buying a few parks- and even that wouldn’t take the whole $250K if you bought on an option.
Re: I dont think that is comparable… - Posted by michaela-ATL
Posted by michaela-ATL on August 26, 2005 at 15:50:17:
I don’t think why it’d be difficult to transform 250k into 1 million in 8 years. If you know what you’re doing, you can find deals, that can give you that. If someone can make 6 figures per year without any of his/her capital, then having 250k starting capital can only increase that manyfold
I started in this business about 3.5 yrs. ago with 85k from my 401k. I have turned it into about 4mil. Not too shabby for a newbee. Of course I have spent many bucks on “edumakation” with the gurus. It has paid off for me. Yes you can get the same info on this and other sites, but the bang for my bucks came from the face to face stuff. Seemed to work for me. (By the way, I still kaint spell worth a dime Rember it is my keyboard, not me).
Re: I dont think that is comparable… - Posted by Alexander (FL)
Posted by Alexander (FL) on August 27, 2005 at 10:41:54:
Don’t know if I would call it difficult but it is surely possible.
When I started investing in real estate, my “net worth” was negative.
With passion and determination and a little cash, I was able to accumulate a net worth of $2.5M in 7 years.
I’m not a regular here. Just browsing for the fun of it. I’m personally quite skeptical about the RE market going forward. Many, including Alan Greenspan, think that the RE market is currently in a bubble (Greenspan refers to it as “froth” in certain markets). Predicting a top in a bubble is next to impossible. As long as prices are going up, RE investing and flipping is a very profitable enterprise. If prices start flattening, or worse, falling, making money in RE will become much much more difficult. The most aggressive investors may in fact lose their shirts. Personally at this point in time, my advice to you would be to keep your day job. That day job may be quite valuable if in fact there is a pop in the RE bubble.
Hey Alexander, I really thank you for your response. If you don’t mind can you tell how you were able to do this…ex buy and hold…rehab and retail…Again thanks.