Math isn’t boring. Numbers can be sexy, too!
GQ Magazine has a series called “My First Million” - it shows how athletes and other celebrities spent their first one million dollars. While this series is hilarious and sensational, it sometimes makes me cringe.
Very few of the interviewed guests spent more than 10-15% towards investment real estate. Why is that? The numbers aren't as sexy as a new car or piece of jewelry?
Let's be honest. If I was gifted $1,000,000 today, I might spend a chunk of that on a new wardrobe. (I love my suits.) But, what I do know, is that the media and other news sources never really show the power of investment real estate. I think this causes a significant pitfall in consumer behavior.
Let me tell you about a recent transaction & how even though the property wasn’t exciting, the returns certainly were.
My clients invested $50,000 into a real estate transaction. Within 18 months, they received a check for $50,000 (recouping their original investment) and an additional check for $13,400.
Their total ROI (return on investment) for the deal was 26.9%
Their total IRR (internal rate of return) for the deal was 18.94%
Where else are you going to find these returns??? Legally
Out of curiosity, I Googled “What Investments Give the Highest Returns?” and came across a prominent article citing:
- Crypto Investment - which had an explosive 127% increase followed by a detrimental crash
- Individual Stocks - which topped out at a sad 7.5% average return in 2022, according to J.P. Morgan.
- Angel Investment - An honorable mention
- IPOs - An honorable mention
- And finally, at the bottom of the list, they list Real Estate Investment as an afterthought.
Too often people are looking for exotic investments they can show off to the world, but sometimes, its the simplest deals with the most profitable return.
Although no results are typical, and you should always speak to a licensed financial advisor before making an investment decision of any kind, my clients experienced returns far greater than anything on this list, without the incredible risk associated with exotic investments like cryptocurrency.
I think its time to change the viewpoint of investment real estate.
Investment Real Estate creates passive income.
Investment Real Estate is valuable.
Investment Real Estate is SEXY.