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why not, people have done it before.
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Took me 2 years to get a million in equity… Remember the first million is the hardest to get! I do not know about cash if you flip and flip and rent I would say 2 if you work it right!
I want to know details! I would love to try this and see if it works for me. Maybe we an compare notes as we progress!
Definately like reo said 2 yrs, but why not try to make it sooner…the sky is the limit in rei!!
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Ok, let’s play scenario’s.
With Flipping I have heard you don’t want to do a deal for less then 10,000… for figuring averages lets go for $25,000 per deal.
Now this scenario isn’t the best it is just a easy way to look at the figure.
Let’s say perfect world it takes 3 months to go from finding a place, fixing a place, and then selling a place. And some could say “I do 2 of these a month” but I will say conservative numbers and say you find 1 a month.
What this means is in one year time IF you don’t spend a dime you will have $250,000 in green cash. Without renting it will take you four years of not touching a cent to make your million in Green cash and not a piece of property to your name.
Let’s say that you want to invest in 4-plex homes and in a perfect world they are selling for $400,000 and you put down $50,000 as a down payment and can some how make $250 per month in direct cash flow per apartment after all expenses. (I like even numbers and that makes $1,000 per month)
So you flip on the 3rd month, fourth, and fifth month to raise the money to buy the first property and keep $25,000 in reserves from there you get $1,000 per month
6th, 7th, 8th : Now getting 2,000 per month and have $53,000 in reserves
9th, 10th, 11th: Now has 3,000 per month and have $84,000 in reserves
This will continue until you get to the magic number and as you can see the green cash doesn’t come that easy this way… might be less then 4 years but it would take some figuring for this hypothetical scenario.
Now what REO was saying about equity is that at the 11th month you might only have $84,000 but you also have 3 separate 4-plexes worth a minimum of $1.2 Million which you can then borrow against or use to bargain for bigger and better things. and you have $3,000 per month each month whether you work or sit back…
Ok, I did the math to go up to the 23rd month: you would have $238,000 in reserves and $7,000 per month (plus have $2.8 million in equity)
Swirlaze,
I think that it would take 10 years or more if you wanted $1 million in cash. VERY few people have that much cash, while a LOT of people are millionaires. IF you ever reach your goal, what are you going to do with the money. If you keep it in cash, it’s not working very hard! If you spend any of it, you don’t have $1 million any more. If you invest it, then it’s tied up or at risk and you no longer have $1 million in cash. That’s why most millionaire’s don’t have $1 million in cash - they invest it and make even more money.
In addition, if you ever tell anyone that you have a million in cash, someone WILL sue to try to get it. You’ll become a big target and everyone you know will have their hand out. In short, you will be miserable!
What I’m saying is that I think your goal is a bad one. Why not concentrate on building a certain amount of passive income that will assure the lifestyle you desire. Having $1 million in the mattress won’t benefit you even one little bit. You’ll work and work and only have a stack of paper that you don’t touch!
Mike
What Mike said before is dead on. Swirlaze, you also made light of reoconsultants million + in equity. However, I know that his “equity” happens to bring in a steady five figure monthly income. That’s the cold hard cash that you’re dreaming of having, btw.
And while we’re talking about dreaming, let’s be clear here. What you’ve posted so far is not a goal, but a dream. It only becomes a goal when you’ve laid out how you’re going to get there and in what time frame.
And as far as timeframe goes, no one here can truly even give you the first clue as to how long it will take YOU to get to your dream/goal. YOU are tke key factor.
I know of one investor that has already made $1.7 million so far this year (and that was in July), and yes, that’s cold hard cash profit. However, as propertymanager pointed out, it doesn’t sit under his mattress or even rot in a bank. It’s put into earning more $$$. If you really want to get to $1M in cash, you’ll have to learn that lesson, too. Have your money earn money.
Just another example to show you the possibilities. I went to a convention where Robyn Thompson was speaking. She now makes $2 million plus a year investing in real estate. She does 2 deals a year, each netting $1M +. One deal, $1 million in cold hard cash.
Raj
I agree Raj
The other factor to take into consideration is What size of deals are you doing if you are working with 60k houses netting 10k profit on each one you need to do 100 of them if you are working on 200k houses netting 20k on each you need to do 50… Where as if you are doing commercial property netting 500k each you need to do 2… Also like it was said what are you going to do with your $$? I do tax liens that pay 13% interest and every deal I do I buy 1oz of gold (probably not the best investment I like it though)
Then take into consideration if you are just flipping it is all taxed as income if you are just pulling cash after cash! That is no fun at the end of the year…
if you’re not willing to put in the effort to figure out how long it’ll take you to make a million,
then you probably never will.
i spent countless hours going over budget in an excel spreadsheet 4 years ago, trying to
see how and where i could economize to save up for investing. that progressed into trying
to figure out what sort of returns i would get for each investment. that progresses into how
long before i reach such and such goal.
if you can’t do this for yourself, you’ll probably need someone to tell where you to invest,
whether something is a good deal, how to do your taxes, how much paint you need for
a rehab project, etc.
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Wilson put it best when he said “Most investors do not plan to fail, They fail to plan” (sorry if I misquoted you sir)
look at it like this CHANGE YOUR WAY OF THINKING plan on making $1,000.00 then $10,000.00 then $100,000.00 Then $1,000,000.00 now it you look at the big difference it is 999,000.00 Now look at the small difference it is just 3 zero’s who cares about a zero it is nothing big as a matter in fact it is the lowest number out there and 0+0+0=0 so there is nothing to worry about it is just a zero!
Life is hard by the yard yet its a cinch by the inch!
by the way Swirlaze want to compare bank statements?
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your still young though right? I went from homeless to owning 5 houses and having 145k in the bank in 45 days! So it can be done.