We are The Real Deal Homes Team
Brokers Guild Classic
7995 E Hampden #100
Denver, CO 80231
We KNOW Real Estate ~ We're The Real Deal
720-300-4441
Ask About
Our $500 Down
Deals
See Our Extensive Instructional Videos On...
Copyright (c) 2011 Richard W Stillman - All Rights Reserved
Search Homes for Sale NOW
by Clicking Above
by Clicking Above
Common Stock vs. Rental
Real Estate Values
How You Make Money
in Real Estate
Flipping Houses: Is it Better
Than Buy and Hold?
5 Mistakes Real Estate
Investors Should Avoid
4 Ways to Value a Real Estate
Rental Property
The Big Picture: How You
Can Make it Big in Real Estate
This information just may change what you thought about investing. Get ready. For these examples, you are going to invest $20,000
for seven years:
Situation #1 - You invest $20,000 in a mutual fund that earns five percent a year. After seven years your investment will
have grown to $28,142 - a 5.8% annual return.
Situation #2 - You invest $20,000 into a rental piece of real estate property costing
$200,000. Assume that the income keeps pace with the expenses, more or less - and that the property appreciates at five percent a
year (the same as situation #1 above). After seven years your property will be worth $281,420, and your equity will now be $101,420
(the $281,420 minus the amount you owe the bank). Not bad - for the same $20,000, you have $93,278 MORE than in situation #1.
Hold on...
Situation #3 - You invest exactly as you have in situation #2 - but instead of letting your equity compound, you borrow
out the appreciation every two years (which will again be $20,000) and invest it in another property. After seven years your four
properties will be worth a combined total of $978,201, and your equity will be $258,201 (assuming no market fluctuations). Wow. That
makes situation #2, which we loved until now, look a bit skimpy, doesn't it? And, it would take investing your $20,000 over nine times
as much in order to get the same results in the same time period using situation #1. In other words, you would have to invest over
$180,000 in situation #1 - to get the same results. But, you invested only $20,000 (and we didn't include rental income, loan
buydown amounts, or depreciation).
If you think this is amazing, you're right. We can show you how to start. Call us.
Situation #1 - You invest $20,000 in a mutual fund that earns five percent a year. After seven years your investment will have grown to $28,142 - a 5.8% annual return.
Situation #2 - You invest $20,000 into a rental piece of real estate property costing $200,000. Assume that the income keeps pace with the expenses, more or less - and that the property appreciates at five percent a year (the same as situation #1 above). After seven years your property will be worth $281,420, and your equity will now be $101,420 (the $281,420 minus the amount you owe the bank). Not bad - for the same $20,000, you have $93,278 MORE than in situation #1. Hold on...
Situation #3 - You invest exactly as you have in situation #2 - but instead of letting your equity compound, you borrow out the appreciation every two years (which will again be $20,000) and invest it in another property. After seven years your four properties will be worth a combined total of $978,201, and your equity will be $258,201 (assuming no market fluctuations). Wow. That makes situation #2, which we loved until now, look a bit skimpy, doesn't it? And, it would take investing your $20,000 over nine times as much in order to get the same results in the same time period using situation #1. In other words, you would have to invest over $180,000 in situation #1 - to get the same results. But, you invested only $20,000 (and we didn't include rental income, loan buydown amounts, or depreciation).