I working on this deal where I have 1 million and I need to turn it into at least 8k a month in cash flow. Do you guys have any good ideas?
That’s easy. Look for any investment that has atleast a 9.6% cash-on-cash return.
With leverage you should be able to accomplish this with ease.
Thank you for your response. Do you have any specific examples?
Most commercial real estate deals give that kind of cash-on-cash return if properly leveraged. Shoot. The historic performance of the S&P 500 is above 10% ROI.
Several brick and stick banks will be able to get you 9-11% return if you want to deposit $1M in their accounts. You’re their golden boy and they’ll want to do business with you.
You should be able to get 6-8% with a CD alone!!!
Be a hard money lender! You’ll get 3-6 points up front and 12-15% interest on short-term loans
Set up a deal with a local mortgage broker for help financing problem buyers, either with a straight loan or helping with 2nd notes.
Buy existing notes for a discount and collect those payments.
Become a passive investor. Be the “money man” in the deal and get a 50/50 split in the profits. Or a private lender, which is less interest than a HML but more stable. I’ll gladly pay 10-12% interest on private money, and keep it turning year after year!
Just a few examples
Raj
Roger gave a bunch of good ideas. Why are you only looking for a 9% return?
thanks Raj, the people who have the money want a very passive income at the 8-9k/month range. Something they don’t really have to worry about. I think being a HML might be a little too much for them because they are not very real estate minded.
Throw it at a hedge fund…or buy a large apartment complex and hire management.
8-9k/month is the amount that is specified for the designated living style. Anything that i can get extra over 8-9k/month i could probably tap into for the cash flow
so you would be a “Fund manager”?
Charge 7% - 10% of profits above the target they have set.
The average McDonald’s takes in $2M/year with 17% pre-tax profit.