How To Get A Good ROI In Real Estate
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How To Get A Good ROI In Real Estate


How do you get a good ROI in real estate?
I am so glad you asked this question? So check it out. Getting a good ROI is
really going to be a function of 2 things. Number 1, did you get a discount
on the property? And number 2, what is your strategy? Okay? Those 2 things are
really going to determine whether you do well on your ROI or not. Like let me give
you first a really bad example and then I’m going to give you a really superior
example. If we use as a bad example, flipping. Because flipping often looks
good on paper and in reality doesn’t turn out the way we want. You’re doing
this deal, you’re doing a flip, you’re crunching the numbers and here’s what
you ultimately find out. I have a property that has a value of $200,000. I
can purchase this property for let’s call it $150,000. Now, you’re looking at the numbers and you’re thinking, that’s
$50,000 of equity. It’s worth 200, I can get it for 150. $50,000. That’s got to turn into a great profit, right? You’re thinking so. And what
I want you to understand is this is a 25% equity position which means
150 is 75% of the value of 200 or the difference
between 200 and 150 is 25%. So that is an excellent equity position for
like a lease option or short-term buy and hold which are strategies that I
love. But in this case, you get into this deal and you got $50,000
to play with and you’re thinking, “I’m going to make a big chunk of money.” But as
you dive into the deal, you might actually find that hey, there’s $25,000 of repairs. You thought it’d be 15 but it turned
into 25. And then you’ve got closing costs. Let’s call it five
thousand dollars and costs to actually close this. And then you have a realtor
that’s actually selling it for 200. They’re charging 6%. So that’s
going to cost you another $12,000. By the time you add that up, you
took that $50,000 a possible profits and it’s
turn into $42,000 of expenses. That leaves you, they didn’t say in 1542. That
leaves you $8,000. Now, some of you’re like, “Dude, I could use an extra $8,000.”
That’s way too much risk. That’s way too much liability for such a small profit.
You only need something to sweet go bump in the night and be wrong and boom!
You’ve lost your $8,000. So that’s way too small of a margin. You’re asking this
question of how do I get a good ROI. It is a function of 2 things. Number 1,
it’s definitely going to be a function of discount up front. And number 2, it’s
going to be a function of strategy. These 2 things are really what’s going to help
you get a good ROI. So first of all, let’s just talk about how you implement this.
Number 1, you need standards. When you find a deal, you’re looking for a certain
level of discount, right? I always love to bypass realtor’s and go right to the
owners because they’re already going to pay 6% out. 6% is is something that could be
construed as savings. If I have someone doing a 10% discount on the property and
I get another 6% by not paying realtor fees, that’s a 16% discount. For me,
I am always looking for a 15% discount minimally, just in doing the deal
itself. But on strategy, you’ll notice (If you’re a subscriber to my channel. If not,
fix that right now.) that I do this thing called a lease option. It is one of
my strategies. It is a beloved strategy. Because the lease option,
it makes me two-and-a-half times more money than a rental. Like just quickly, a
renter gives you a refundable deposit. A lease option person gives you a
non-refundable downpayment. These people pay 1200 and rent, these people
pay 1500 and rent, right? You know, these people, you know, they don’t
have an interest in taking care of the house. These people are going to do all
the repairs and take care of it. You start adding up those financial
differentials and guess what? This becomes… The strategy is going to
impact my ROI. The discount is going to affect my ROI. So, those are the 2 most
important things that you want to be aware of when you’re actually out in the
game of real estate. There are so many people that get in the game of real
estate. And you know what? They have not put their focus here and the
real estate investors that have failed that I meet, if you want to know what
they all have in common, they didn’t know how to crunch the
numbers. They just got excited and thought, “If I buy a home over time, I’m
going to do well.” That is not true. If you buy something at market and you don’t
have the right Lease Option strategy, then all the sudden when the home
doesn’t do what you want it to do, you’re going to get jammed up. You’re going to get
into a position where you need to pay money every month to support your
investing. And that’s when you have done it wrong. I remember the very first house
that I ever did. The reason why I got excited about it is because I ran the
numbers. I knew it was worth X and I was buying it for Y. That has been important
to me on every deal I’ve done because it is a function of ROI. Now, the discount
the equity is not the most important thing. The strategy then becomes the
second most important thing because if you’re going to hold this home for a period
of time, that’s also going to factor in. The reality is I wouldn’t have a YouTube
channel and I wouldn’t be able to say what I’m doing and I wouldn’t be buying
the hundreds of homes that I am. Unless I wasn’t doing these 2 things actually
correctly every single time. None of it would exist without this so. Don’t get
excited as a real estate investor to just get out there and have a deal. You
got to have standards. Now, I want to share with you, as a bonus, what my
standards are on ROI. What I’m actually out there doing a deal, I have some
minimums. Bare minimum, I want to make 15% a year on
my money. Now, a lot of my deals I’m doing 20% some of them 25%, some
of them even more. But the reason why I have this minimum is because if my real
estate is earning 15% and compounding every year, it takes roughly five years
for my money to double. Now, just think about that for a minute. That is a huge
deal. If I got 50 grand in real estate then 5 years later that’s become a
hundred grand. 5 years later it’s become 200 grand, 5 years later
become four hundred grand. Now, there’s accelerants where you can go way faster
than that. But this minimum ROI, this allows people all day long to come to me
and say, “Kris, you got the deals. Let’s play.” And that’s actually something that
you yourself may actually want to do is that I have people that will evaluate me,
my system, my track record and then say, “Hey, you either are one of 2 people.”
You’re either going to say, “I want to do this myself.” Or you’re going to say, “I want
someone to do this for me.” And both of those options exist in the world of real
estate. So ROI? two most important things, if you want to
have a good one. Get a discount on the property, contemplate the right strategy.
If you’re not sure what the right strategy would be, then I’m going to
recommend that you talk to a member of my team because I’ll give you a full
blown strategy. All you have to do is click the link in the description below
and me and my team will reach out and show you exactly what it is to mentor with me.
Have me show you the ropes and get you out there doing profitable real estate
transactions. For the rest of you that are saying, “Well Kris, I actually thank
you for the video. I’m on my way. I want you to go ahead and subscribe to the
channel.” I drop nuggets and knowledge every single day like this that can be
useful and helpful for you. And at the end of the day, a lot of people sometimes
wonder, “Kris, why are you doing this? Right? I mean, the videos they take some
time and effort to put together. If you’re retired, why would you actually do
this?” I want to tell you that I’m helping you learn how to make a lot of money in
real estate. But once you do, you’re going to have to figure out who you aren’t really
what you want to do with your life. Because when you don’t have a boss
telling you where to be, when you don’t have someone else y’all yanking your
chain and telling you what you have to do with your life, it really puts you in
a empowering place to discover how are you going to leverage your freedom. And
for me, part of it is playing, part of it is traveling the world, part of its being
with my family. Part of its enjoying the nicer things of life. Part of it is
serving my community. And a part of it is giving back. And this channel is a way
for me to build a community of individuals that want to be super
successful. I don’t care how young or how old you are. I don’t care whether you
have money or you don’t have money. If you want to be part of a community that
can help you figure out how to do this stuff the right way all day long, then
talk to a member of my team in that link below. And read the information on what
we’re doing here and let’s actually show you the ropes of the right way to do it.
And then give you the support that will make the difference. So that you can have
that freedom and success in your life.

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