Ninjastic
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Board Securities
Re: [bitfunder] RentalStarter - A Midwest Real Estate Investment Company
by
Branny
on 31/07/2013, 13:34:28 UTC
Quote from: thatbluedude on July 31, 2013, 07:12:23 AM
traditional mortgage = fixed rate mortage?

Traditional, fixed rate mortgage from a small local bank that keeps all the loans inside their bank.

Quote from: Peter Lambert on July 31, 2013, 12:50:30 PM
Quote from: Branny on July 31, 2013, 02:41:28 AM
Quote from: Peter Lambert on July 30, 2013, 07:30:52 PM
Quote from: Branny on July 30, 2013, 03:42:44 PM


Mill St looks to be 25% simple ROI and Railroad looks to be 30%. These are all pre-leverage numbers. Once we leverage the return will be infinite.

Maybe I am missing something obvious, but can you go over once again how you get to infinite ROI?



$45,000 buys property #1 (Purchase + Rehab).

We then refinance the property with a local bank using a traditional mortgage. Bank then gives us back $45,000-$70,000 on the mortgage. Property income pays for mortgage indefinitely + dividends to investors.

So within 3 months the property has returned 100%-155% of the purchase price. So then, there is no investment in the property at this point yet it still brings in several hundred dollars free and clear per month.

So, what is $300 a month in income on a investment of $0 (Since it has been paid back in full)? This is why I state it's infinite, the original investment is paid back plus extra.

I would rather say you get a 100-150% single time ROI after refinancing the property and then a continued 0.67% ROI per month continued after that. You just add more ROI on top of that when you repeat the process.

That would be right too, however so far I haven't been able to get most people to grasp the concept that all the money that goes in to a house comes back out 2 months later.

That money is then re-invested in a brand new property and continues to repeat the process.

A $45k investment *Should* be able to be rolled over 3 or 4 times in the course of a year, each time bringing back through re-finance the original $45k + a little extra. So after 1 year there's a real potential for that $45k buying $400k+ in real estate.