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10x? I'm not familiar with real estate. How does one earn 10x in that time frame. Even with a price to rent ratio of 1 to 15 and assuming housing prices doubl
by stagger87 6y ago
10x? I'm not familiar with real estate. How does one earn 10x in that time frame. Even with a price to rent ratio of 1 to 15 and assuming housing prices double over that period, you still aren't at 10x, and that doesn't include maintenance, taxes, closing fees, etc.
- readams 6y agoLeverage. Let's say the inheritance was 50k. You make that a 10% down payment on a 500k house. Assume rent covers your interest on the loan, taxes, etc. 10 years later the house appreciates 100% to 1M. You sell the house. You just made 500k from 50k.
- perl4ever 6y agoDid you mean "etc" to include maintenance, principle payments, and transaction costs? It doesn't sound like you're describing the magic of leverage, but the magic of having an arbitrary amount of cashflow. Makes me think of https://en.wikipedia.org/wiki/Robert_Kiyosaki https://en.wikipedia.org/wiki/Robert_Kiyosaki and https://en.wikipedia.org/wiki/Trump_University https://en.wikipedia.org/wiki/Trump_University
- chrisseaton 6y agoInstead of just buying an asset and then selling it, you can also buy an asset, use it to make money while you own it, and then also sell it.
- rjkennedy98 6y agoNot too hard if you buy California real estate with 10% down in the 80s.