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How to Get 40% Return on Investment for Real Estate

How to get 40% Return on your hard earned MONEY, year over year, for the next 100 years! Do you really think this is possible? I am here to say YES! Truth be known, in the world of real estate the men and women who have made wise decisions for the past decade have had this type of return year over year. NOW, I would suggest that those who were wise, were very cautious when the market began to go gang busters in 2005 and 2006, they where not jumping in full bore with hand and feet without a care in the world like too many did. Upon talking to many successful real estate investors, I found out that during those years, they made one or two great buys and sells and since the market was doing jumps in the 30% and 35% range all bye itself it didn’t take a genius to make 50% those years. The point of this blog as a vision moving forward, and these principles when APPLIED pre-2000 would have netted real estate investors 50% ROI, year over year. It is a simple concept actually a concept the Japanese and Chinese cultures use in their manufacturing, and in sales, and in distribution of their products. Let me first define year over year return so we are talking about the same thing. January 1st, you invest $100,000 on December 31,  you have $140,000 back, so you have earnings of $40,000 in a year, or 40% increase from your initial investment….OR, if you invest $200,000 you get $80,000 in earnings for the year.
In terms of gaining a 40% ROI when it comes to Real Estate Investments is to do more than one transaction a year, in my example you will do 5 or 6 transactions. Here is a quick list.

1. Do more than one transaction per year
2. In each transactions LIMIT your LOSES, because lets face it the world isn’t perfect, and mistakes happen.
3. Try to make 8 -12% on each Transaction…NOT 25% or more….
4. Try to purchase and HOLD, ONE of the properties as a rental
5. Purchase homes at 10 – 15% below market value
6. Purchase all your homes through Justin Ruzicka, The House Guy

OK, so the last one is a shameless of me, I know. Now lets do the math on 5 properties, this is actually math I have done for customers over the course of 2012. The agreements I have with my investor groups/clients is a 50/50 on Profit Sharing, I provide a discount on Real Estate Commission, but beyond that, I find the homes, inspect,  manage repairs, I have a team of Contractors, Sub-Contractors who are trustworthy, and do a top quality job for the lowest costs.

1. Lehigh Acres Home 1
Purchase Price: $62,000
Repairs: $10,000
Resale $103,000
Resale Expenses $9875

Profit Share: $10562 in 120 days
Investor ROI: 14.6%
Annual ROI: 44%
2. Cape Coral Home 1
Purchase Price: $72,000
Repairs: $13,000
Resale $109,900
Resale Expenses $8440

Profit Share: $8230 in 114 days
Investor ROI: 9.6%
Annual ROI: 38%
3. Lehigh Acres Home 2
Purchase Price: $125,000
Repairs: $7500
Resale $165,000
Resale Expenses $15200

Profit Share: $8650 in 95 days
Investor ROI: 6.9%
Annual ROI: 27%
4. Lehigh Acres Home 3 (HOLDING as Rental)
Purchase Price: $75,000
Repairs: $0.00
Resale $0.00
Rental Income $7200 (8 months for 2012)
Taxes/Insurance $1500

Profit Share: $2550
Investor ROI: 3.4%
Annual ROI: 5.64%
5. Fort Myers Home 1
Purchase Price: $71,000
Repairs: $11,500
Resale $105,000
Resale Expenses $10,753

Profit Share: $5374 in 165 days
Investor ROI: 6.5%
Annual ROI: 14%

1: 14.6%
2: 9.6%
3: 6.9%
4: 3.4%
5: 6.5%
TOTAL: 41% ROI in 2012!!!

The short story long, steadily plodding leads to prosperity…Isn’t that a proverb?

If you would like more information on current real estate investments in Southwest Florida please fill out the form below.  The has a good portfolio of Investments, years of expertise, and a hands on approach to real estate investing that leads to stronger returns.  I look forward to working with you on your next real estate investment.

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