Rich uncle gives you $5 million, says...

Well Costa Rica is nice this time of year, take the 5 Million and run
and leave no forwarding address. If he is really rich he will not
even miss the money :anon

http://microsites.visitcostarica.com/ict/microsites/

There is a strange Video about childern and teens on here
that freaked me out a bit ,
:help


On a more serious note, With 5 Million you may want to buy
Bulk REO foreclosuers at 30 cents or less on the dollar and blow
out 75% of them to wholesalers for a $2,500 profit each
and make the other 25% cash flow or L/O rental propeties
and sell when the market is stronger.

Of Course there is always Costa Rica…

http://www.hot-tropics.com/costa-rica-real-estate/costa-rica-sunset.jpg

Well, the way the big 3 auto makers are currently begging for money, I don’t think this would pay off. =) I bet GM is bankrupt by Q2 2009, and Ford by Q4 2009. I can’t comment on Chrysler since they don’t release their financials anymore.

How did that FORD play work out? LOL. I’ve been shorting this market for a year because we are entering a massive period of deflation. Commercial Real estate is collapsing. Residential is Collapsing. ALL asset classes are collapsing.

In this environment CASH IS KING.

Wait 6-12 months. You will have the buying opportunity of a lifetime shortly. ROI 80% in 5 years - probably not anymore we are on the backside of an asset bubble…

Give the money to me and I’ll take care of your problem…

Seriously, $5M is a good amount of money. It’s certainly an interesting position to be in…
Hmmmm, the problem with doing anything residential is the management issue. An apartment building, or several, is more management intensive than a Walgreen’s. Buying a ton of houses sounds nice but would certainly require a great deal of management and oversight. I would be concerned with returning his $5M in five years if you loaded up on houses. Another problem is that your uncle is requiring a profit, not a loss, so while you want to maximize your return, you can’t take too great a risk. Even in the commercial end it’s hard to know what’s safe and what’s not safe b/c I don’t think we’re at the bottom yet. It’s also hard to leverage the money when you can’t use debt.

Well, the safe thing to do in the commercial side would be NNN properties with strong tenants, but you get less return. What would the numbers really look like though? It wouldn’t be horrible. A 15,000 S.F. Walgreen’s at $25.00/S.F. = $375,000/year. Over 5 years is $1,875,000 and you keep $375,000 or $75,000/year (more if you get to keep 20% of accrued equity). Not too bad considering you didn’t have to do anything for it.

Thats a brilliant piece of advice right there… I would also buy tons of commercial real estate in emerging markets.

I would do five things

  1. I would fund a whole life policy with 1 million dollars at 5% tax free interest which would be worth $2mil in 13 years.

  2. I would take the 2nd million and buy a 5million dollar apartment building.

  3. I would take the 3rd million and fund a nonqualified annuity with a guaranteed 6% interest rate which means it will double in value in 12 years.

  4. I would tkae the 4th million and play the foreign exchange, continuing to go LONG on the US Dollar vs. other currencies that are slipping into a recession (CANADA, BRITAIN AND JAPAN)

  5. I would buy a group of mobile home parks with the final million and rent the land and owner finance the mobile homes…

With 5 Mill I would buy out a floor of 20 one bedroom units near the Dubai Marina which are worth 6 Mill, so I’d be making $1 million right off the bat, then I would rent out all 20 units at $30000/per unit per year which is the lowest that a 1 bed will rent for in the area, thereby earning me $600,000 per year in rentals. In Dubai rent is collected in 1 cheque for the year upfront or a maximum of 1 cheque now and 2 post dated cheques, so I would be getting all this most of this money right away instead of waiting a year. Maintenance fees woud be paid to a management company who manages the whole building and deals with all the headaches and for these 20 units it wouldn’t run me more than $50,000, so I would have $550,000 in my pocket every year, at the beginning of the year. So this works out to be 11% return annually, paid to you at the beginning of each period, not at the end! and an immediate capital gains of $1,000,000. Assuming now that after 5 years the property value has not increased, (which by all accounts will) after 5 years I could sell off these properties and give my uncle back his $5million and keep $3.75 million for my self, if he wants half of what I make I get to keep $1.625 million. Not bad for a guy with no money to start!

Forgot to mention…

Since there’s no property, capital gains or income taxes in Dubai, everything I earn I keep.