Your chances of being the next Facebook inventor are minimal, but the chance of you buying real estate is possible. I’ll show you exactly how you can get a fifteen percent or higher internal rate of return on your investment. All it takes is cash flow, appreciation and an exit strategy.
An IRR (internal rate of return) of fifteen percent is absolutely possible.
Here’s the IRR math on a deal with below average to average returns:
$4,000,000 property with an initial investment of a $1,000,000 as down payment and $3,000,000 financed. Over the course of ten years, my cash flow each year is five percent and a ten percent appreciation on the equity (not the total investment) totals fifteen percent IRR right there. If you factor in the debt pay down (DPD) of ten years at one-point-five percent, the IRR total is thirty percent.
Pick great assets in great locations that cash flow and wait as long as it takes and then sell at the perfect moment to maximize your investment.
Want to understand the math behind real estate better? Pick up my book, How To Create Wealth Investing In Real Estate.
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