What's A Realistic R.O.I On Real Estate?

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[alberts]

I bought many SFH in the early 1990's. FHA foreclosures, no qualifying in Phoenix area. They were going for about 85k and all i needed was 10k down. No debt on them today. Yes, I used leverage but I was not over leveraged. So I do not agree with Mr. Ramsey that investors shouldn't ever finance investment property. BTW, the terms are more important than price because if you buy right, in a growth area the price isn't really relevant over the long haul.

[christophe_li]

I remember visiting a Ferrari dealership when I was 20 years old and I saw this old dude pull up with his Ferrari to get it checked up. I asked him what his best financial advice was. He said “you make your money when you buy”. Didn’t click until a few years later for me.

[andreispiridon]

15% ROI today is as realistic as it can be
Yes that is cash on cash ROI
$150k home would have a 760 payment with 20% DP ($30k)
House rents for $1400 and yearly cashflows $7680
At $30k DP plus 10 more for some paint and other fees you have $40k into it
That’s 19.2 % ROI cash on cash, factor in other expenses and would get you around 15%
$300k would get you around 7 similar rental homes that would produce 15% Cash on cash
That’s without tax advantages and write offs, without appreciation
And Yes, after 30 yrs of renting 7 homes they would all be paid off and collecting rents from them would definitely beat what any mutual fund or retirement account can give you
If your local market doesn’t offer that, find the market that will

[sctony]

Depends on where you live. Big "rich" city like Toronto, New York City or SF, even 50%+ gain is possible in ONE year. I did it. $300K condo worth $500K now over a little more than 1 yr. Of course, it will NEVER EVER happen in cheap states like Texas or Missouri. Gotta play in a big league.

[dwadholm]

It's 2 years later and it's become an even worse time to buy! The average cash on cash is now around 5%

[lal]

12 percent is not worth the headache of collecting rents and showing units and getting sued and paying for repairs. I'm gonna invest in REITs for now

[Wasphamma]

Be sure to include depreciation recapture tax when discussing tax advantages. Without that consideration, investor's may be get a surprise when they sell.

[KismetSKinNurse]

real time information. horrible time to buy, perfectly said.

[brycedeeney]

Video didn’t age well. 3 years ago... dude would have doubled his money on Phx REI!

[davidgrealestateadvisorsan]

A 100x100 with Dave, good advise . Personally I can find properties en San Antonio, Tx and my last deal is at 8%ROI after expenses .

[MrHavk]

This is one of Dave's best videos. To the point, accurate, full of good information....

Except for one thing. LEVERAGE!!! Leverage is the big advantage real estate has over the stock market. I know Dave is anti-debt, but if used smartly, debt can super charge your returns like nothing else can. For real estate, if you buy right it's the smart play to put 20-25% down and leverage the rest. Put less down even if the deal still works.

[davidking]

Realtors normally don't invest in real estate and know little about investing. A Realtor that knows about investing is busy investing and not turning the deals over to other investors. Find a hard money lender and look for distressed properties with owners that don't want the hassle of a distressed property. Beware of bad neighborhoods. Location, location, location. One percent a month gross minimum return works for me. In time, with inflation, that will increase. Don't let value and inflation get confused. Value is how many gallons of gas or loaves of bread will it buy.

[dwj]

The biggest advantage of real estate is leverage. Not all debt is bad debt

[threadoflife]

Boy if it wasn’t a great time to buy in Phoenix in 2016 and most that bought then are now sitting on 50 to 100k plus in equity like myself I don’t know when a good time to buy in Phoenix is. I purchased June of 2014 and am very thankful with my purchase. For those that bought in 2016 I’m sure they are saying the same, because most are selling out now or holding. I’m about to purchase now in 2019 almost 2020 and boy am I nervous about any potential for future ROI. I’m assuming based off of this video Dave would tell me hands down run don’t do it. I pray he’s not right if so lol. Diving in! My situation is a little different in that I occupy/rent rooms and live for free this way while having my mortgage paid off internally, while I renovate my home, my goal is to do this on a second home now and hope to come out on top again, not everyone is in this situation and I get it. Fingers are definitely crossed this time around! Lol 😂 😬🤑😊🏡🤞🙏🙏🙏

[CEsquivel]

It also depends how well you know your market. I'm a Realtor a bought a sfh and rented it out for 25% roi after all expesnes. The deals are out there!

[cdogvlog]

Real Estate money is not necessarily made at the buy, I think its more made when you buy and hold a property for a long time and you don't try and do all the upgrades all at once. As far as rental property goes I think a good goal is to break even after expenses - cashflow means you have to pay taxes on the cashflow, better cashflowing properties often times have more troublesome hands on tenants.

[Violator]

all i know is that i need that mute button in my life.

[KnowArt]

did I mention that the money is made on the buy?

[darrylt]

Bought my townhouse with 67K down for 310K 10 years ago. Owe $185. Rent always paid the bills. Maybe looking to sell for 660K and have $400K after capital gains and fees.

[dakotadak]

In the long run it will increase at the rate of (1+inflation) X (1+population growth) in the area of the home.  (1.02)x(1.04) that's an example and it'd be ~7%