How Would You Double $500K In One Year?
Let say you are a well seasoned businessman with an ambitions to become a full time RE investor. Your goal is to execute on your business plan, which is to double your investment money in one year. You do not mind putting a full and a half time effort to achieve your goal.
To achieve that goal, you would have to mitigate and divert your tax obligation in the way that protects your earnings the most. You will also have to create the cash flow to manage the ongoing debt expenses if you plan to achieve your goal through purchasing of additional debt (purchase of a property).
To make sure that you minimize your taxes, protect your personal privacy and still be able to operate in your state, you would need to give your busyness a proper structure. Would it be LLP so you can sell partnership shares or a S Corporation selling stock or you'll try to work out of (land) trust or (equity) trust for it's inherent capabilities to hold LLP' s , Corporations, IRA's and even your father's President Rolex behind the close doors?
You'll operate in a hot sellers market. Large city. You'll have the option to invest in other cities etc. In your own city , you see the opportunity in many larger (close to) substandard buildings with 10 -20+ units. In your business plan, you would need to considering SFR pre-foreclosures as well for their inherent potential to bring you back 30K-40K returns (consider on flips, taxes are payable on sell directly out of escrow), rehabs and developing projects as your potential steps.
What should be your moves to make sure you double your money in one year or get close to that goal?
I assume your question is to generate thought. I also assume you mean NET WORTH? Can we only utilize RE as asset building and tax protection, or can we go outside the RE world? If allowed to go outside, I would look into aircraft leasebacks to flight schools for the 50% bonus first year depreciation on the 5-year aircraft. This could offset much of any taxable gain from the RE side, I would think. (It would also generate a positive cash-flow...not a lot, but positive). I would look into the Nevis as an asset-protecting entity, especially with the aircraft, as liability insurance is tough to get at acceptable levels. As for the RE side, I would continue my efforts currently, but invest full amounts of time into the system we use.
Hope this was the kind of info you wanted!
[ Edited by norrist on Date 12/26/2003 ] [ Edited by norrist on Date 12/26/2003 ]
Yes, you can uthilise short term and long term investments. RE and out of RE or any investment avenue in orchestra with RE is OK but you have to have the 1 mill asset or equity in the end of the year. For exampe, if you buy a $500K building and you fix it up so to worth 1.3mill after you invested additionall $300K, which you borowed, that would be the right achivement. But you can show your own scenario including the steps... That's the point of the post
[ Edited by omega1 on Date 12/26/2003 ]
This is a very old joke. To double your money, fold it in half and put it back in your pocket.
If you had to limit your timeline to exactly one year, can I have some flexibility on when that year starts? If so, then consider writing a "How To" book or course. Once you have your book or course written, join the ranks of the real estate course promoters a la Robert Allen, Carleton Sheets, Ron LeGrand, etc.
Let's say you have written just one course you plan to retail for $169. At the beginning of the year, use your $500K to purchase infomercial time on late-nite TV in as many high population markets as you can afford and engage the services of an answering service to take orders.
It has been reported that Carleton Sheets sells about 750,000 courses each year (and has been running his informercial for many years). At $170 per sale, his annual gross would be $127.5 million.
Now, a newcomer to the field would not have the name recognition that Carleton Sheets has and would not expect the sales volume either, but who knew Russ Whitney before he gained notoriety through his informercials? I am confident that this approach will more than double your $500K investment within one year.
Iwould use 500k as downpayment on 2.5m of forclosed property,thats worth 3.5m.giving an income of ???and equity of 1.5m??
Omega,
The fastest way to doubble your money would be..................to fold it in half!!
[addsig]
Thank you steve8788. That's similar idea to what I've already posted above, however it may work unless the problem would be finding foreclosure deal with such a profit potential and margin spread. And as far as investing in RE courses, I'll leave this to other gurus on this site... I learned long time ago that in order to make a lot of money you have to create your own footprints... Common guys what's up with your holiday imagination? No dreams?
I was thinking of something more creative like getting the 2.5mill SBA loan for a mismanaged business that can produce good income flow and could be leveraged for a more then 500K loan which can be placed on the building such steve8788 has described above. In that case you'll have a cash flow business and the foreclosure building.
I thought this is a creative RE site with some of the brightest minds ready to tackle any kind of deal?
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DaveT, actually, the new truth [rather then joke] is that if the people have more ambition, US economy could reach 20 trillion mark by 2015. Knowing how little can be enough to our fellow neighbor, what's certainly OK, I wouldn't bet a $1.00 bill on this to happen before 2025. In regards to those courses, that's a bit risky proposition. You have to have history as a successful investor in the particular niche, be likable, good motivator, etc. After all, what's wrong with good all investing in RE?
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Winners Never Quit - Quitters Never Win![ Edited by omega1 on Date 12/26/2003 ]
Omega1
Where did you find the spell check....Im impressed!!
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Wheeler-Dealer, those beef steroids are obviously hard to digest. Try pure TX savannah grass and then come to post again. We'll monitor recovery.
Gladly waiting!
[addsig]
yeah but they grow 'em BIG here.
[addsig]
How to double 500k in one year?
one hand of Black Jack!
[addsig]
I would go to the tax foreclosure sale next Tue here in Austin. There is a $800,000 building going for $100,000 possibly and several other $200,000 deals for $50,000. It would not take many of these to double $500,000. I too like the new look Omega1. I see you do not just pick on me. Is it Austin that you do not like? Or Texas? Any way I am really enjoying a lot of your posts especially this one. I wish you were offering the $500,000 to someone with the best Idea. I know us Texans would not get it but we love the Lone Star State just the same.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
Why not build? I've seen single lots purchased, leveled, redeveloped with two properties on them and each sold individually for an equivalent price. With expense cost this might not quite double the money but it'll be close. Build time was four to six months on this small project. Any number of ways to do this but you get the idea.
WAY-TO-GO-TEDJR
but unfortunately we wont be hearing from Omega1 for awhile..he is in jail.
wonder if he can make collect calls!
Ted are you gonna take a shot at any of those props?
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
[ Edited by WheelerDealer on Date 12/27/2003 ]
Investing in real estate is the same whether you are dealing with $100,000 or $1,000,000 properties. There are some notable differences but to make money in this real life game of monopoly takes extensive knowlege, experience, and the willingness to fail. Without admitting and accepting to yourself that the fact is that you could lose your $500k you will likely not make much more than the next guy.
You are starting a business. Although it is very possible to start out a business to be profitable right from the beginning, the reality is that it often takes years to be profitable. All business has a steep learning curve which mostly has to do with being in the business long enough to know your market and how to adapt to your customers wants.
You ask a tough question here and therefore you'll get a tough answer. Your rush on making this money is likely to get in the way of your sucess.
Just my 2 cents! GOOD LUCK
Frogger,
Afraid I have to disagree with you. If you are smart, and plan before jumping I think it very unlikely that you will lose your 500k. You may not double it in one year, but if you do your homework you should certainly create income and positive cash flow.
Personally I would do foreclosure and tax sales. Normally I can find properties that are sold for 60% of the loan price, or even better, tax properties that are dirt cheap. I average at least 25k profit on these either before or after rehab. It may take you more than a year, but you'll get your double.
G'Luck!
Quote:
On 2003-12-27 16:13, WheelerDealer wrote:
WAY-TO-GO-TEDJR
but unfortunately we wont be hearing from Omega1 for awhile..he is in jail.
wonder if he can make collect calls!
Yeah, Omega1 is a legend in his own mind! It is guys like him that think they know it all and sit around and complain that never make it!
Ted are you gonna take a shot at any of those props?
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
<font size=-1>[ Edited by WheelerDealer on Date 12/27/2003 ]</font>
I thought I posted this the other day utilizing a much smaller amount.
I think it was $50,000. I think I got up to about $1,400,000 or so as the return in 12 months. Any one of you can do the same thing and you do not have to buy books, be mentor'd or have your hand held by some self styled Guru whose claim to fame is he had a good Editor who turned his Burnt Stew into Golash.
The test is at the Door. You ring the bell and take it from there. So simple, nothing more.
The time has come I wonder why you do not all see it. If I see it so plainly and am just starting into it what gives with you guys. I have no special talents. No hidden agenda, I am starting all over again and I find it kicky and exciting.
I went down to the Container Port the other day and spent the day learning how to handle a Plasma cutting machine so I can instruct others in how to cut out doors and windows. You can all do the same thing. I went to the building department and spent two hours with a plan checker so called engineer. The only thing he could engineer was a Baloot. Oops inside Philippine joke. But you can all do that. If you can build new housing for $20 a sq. ft. and sell it for $40 a sq ft and still way under the market, go do it. If you can take steel containers slurp down two Martinis and start designing something that architects look at and say, Oh my God shades of modernity brought to the year 2004. Industrialized objects turned into an art form. etc. etc. etc. You can all do that. You all played with blocks as a child, this is the same thing. You all played with crayons and paints. Well here it goes again.
As to writing a book, on how to do something that is right there in everybodys head. Usualy something that the person involved in the writing could never do. You see if you have scam in your head instead of help, you loose. the funny thing this holds true for most things. Especialy in Real Estate. Brokerage or Investing.
The information revolution is in full call. A few more changes and away it goes. We are going to turn into a nation of single souls all encapsulated in their home office, communicating on line with little cameras mounted on the monitors.
We will buy non scholary books written by self contained super salesman who set up enormous organizations of on line closers to milk them to death.
To gain material and to stay current and up to date on the newer scams, I play with them. The one the other day who was going to put a full time mentor on call for me, after I gave him my card to withdraw some $8,000. going to teach me all about Real Estate Flip/Flops. When I asked him who made the starting bid at a Calif. foreclosure, he did not know. Did not know the names of the three parties to a Deed of Trust, As a matter of fact he had never been to California and frankly I do not think he was qualified to change a light bulb without massive assistance. He was fronting a Bob Allen and some other name organization. They had the contract from them to do the "On Line Massage", the amount dependent on how much you disclosed to them on the pre-contacts. It's a classic Con, qualify the Mark, then sink for the discovered amount he is capable of investing in a Mentor, close with card on line and fast while the music of the con is still in his ear.
This place is a university combined graduate school. It is all here. I have just come up with the first project for the Deal Shop just how I get it all out I am not sure, but everybody in the shop list, is entitled to make a rip roaring idiot of themselves, just like me. Lets see what comes out of that. Braintrusting does not go right down the middle, it goes out onto the crackpot fringes and there fellow investors is where the really far out ideas come into fruition.
Enough, enough the maiden cried, I must go to work on this idiots PhD for which I am being paid an ungodly sum. Dying to see what he is going to do in the oral defend. I suggested he fake an attack of Epilepsy maybe speaking in tongues will help. Can't help but be an improvement. I really do not know why he wants a PhD, he can't teach, he is worse picking up women then me and his father does not want him in his business. Ah well, strange are the ways of the world.
Enjoy Lucius
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with the 500k i would purchase 2 lots in my area that are for redevelopment. each lot 10 units each unit 135k
thats 2.7 mil total
construction 960k
loan cost approx 100k
and is you arnt a contractor 150k
demolition 40k
total profit inc. your investment 1.45mil
and with a good team you can do this in less than a year
myfrogger,
RE in my book remains the most productive as a long term investment tool. In combination with some cash flow business, it's irreplaceable (specially if you buy on fire sale ) ...
The whole purpose of investing in RE is it's inherent stability due to the historic curve of appreciation that creates the passive earnings in orchestra with deductions allowed by IRS. Yes, the population grows too so it contributes to higher demand but we will not go into that.... today. Short term investing, flipping etc. it's OK if you do not have a better thing to flip, but if the RE is good for flip, it would long ago be listed on the Wall Street Board ... as let's imagine.. price/per sft
We've seen some great posts and comments posted under this Topic by Lucious the Great, norrist, DaveT, steve878 and Tedjr. and I can only encourage all of them to continue their so far great contribution further. However, there is alwyse "the one" ready to ignore that "boring" rule of fair play:
WheelerDealer,
You been posting many unrelated comments throughout the forums lately. Would you please STOP? Investors come to TCI to exchange opinion and learn something new and you do not contribute to either of that. If you do not have a better thing to do, please do it somewhere else!
Thank You
[addsig]
[quote]
On 2003-12-27 23:32, Jeffca wrote:
Quote:
Yeah, Omega1 is a legend in his own mind! It is guys like him that think they know it all and sit around and complain that never make it!
Omega,
I dont have time to defend myself to you. All who have read my threads can form there own opinion.
The mature would keep there derogatory comments to themselves. Ive never put anyone down on this site and neither should you. If youve got a problem with me or anyone else you should send it in a "pm" or to a moderator. Dont air your dirty laundry in public forum. Handle it like an adult please.
To enjoy a site like this you need to have a sence of humor, have fun, learn something, offer something, and grin and bear it.
If you cant take it, Omega, dont dish it out!
_________________
B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)
[ Edited by WheelerDealer on Date 01/01/2004 ]
WheelerDealer,
I did not ask you to defend yourself. I ask you to do nothing somewhere else:
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The fastest way to doubble your money would be..................to fold it in half!!
_________________
Where did you find the spell check....Im impressed!!
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WAY-TO-GO-TEDJR
but unfortunately we wont be hearing from Omega1 for awhile..he is in jail.
wonder if he can make collect calls!
Yeah, Omega1 is a legend in his own mind! It is guys like him that think they know it all and sit around and complain that never make it!
_________________
B.G. & Wheeler D. LLc Inc.
“The mature would keep there derogatory comments to themselves.”
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The posts above are all YOURS and in my opinion completely irrelative to this topic. If you or anyone who would like to support you believe that above posts are relative to the subject of this tread: (“How Would You Double $500K In One Year?”), please explain what one could possibly learn from such slur?
And by the way, if you couldn’t distinguish in your spell check editor between “there derogatory” and “their derogatory ”, you should certainly ask for help on one of the relative forums. It may truly make a better use of your time...
[ Edited by omega1 on Date 01/01/2004 ]
Put on those boxing gloves and go outside guys!