How to make 30%, 40% and over 50% profits in as little as 4 to 8 weeks.
I mentioned in previous posts that there are 2 strategies you can use to make massive returns through property investments.
Before I get into the returns you can make on the various strategies let me first explain what ROI and ROE mean so you can better understand the meaning of my following examples.
a) Return on Investment (ROI) — the return or profit you achieve at the end of the project Vs the cash you have physically put in plus money you have borrowed.
b) Return on Equity (ROE) or commonly known as Cash on Cash return — the return or profit you achieve at the end of the project Vs the cash you physically put into the investment. Your cash…Your deposit…Your personal investment.
Strategy # 1 — Developing a property (buying land or an old home, obtaining development approval for a 2, 3 or multiple-unit development and building) is the ultimate way of making massive returns on your investment.
With the right system and knowledge, when doing a full-blown development (2 to 3 units), an investor should be aiming to achieve a return on investment (ROI) in excess of 20% to 30%.
What this means is, you should be able to achieve cash on cash return or return on equity (ROE) of between 80% and up to 300% or more.
Developments can have a life span of between 12 to 18 months depending on the nature and number of units you are building.
Example — If you were to purchase a property to develop and you invest $100K of your own cash as a deposit, stamp duty, etc., plus borrow the rest to buy the land, plus borrow the costs to build after obtaining development approval, you should be looking to have returns of at least $80K to $250K after paying yourself back the original investment you put into the project.
Strategy # 2 — Renovating a property is also a very powerful strategy for generating substantial profits. Again, the right system and specific knowledge in undertaking renovations is crucial.
With the right system and approach, an investor renovating a property should be aiming to achieve a minimum return on investment (ROI) of between 10% to 15% which means a cash on cash return (ROE) of between 30% and up to 50% after paying yourself back your original cash investment.
Cosmetic renovations can take as little as 2 to 4 weeks and much larger and substantial renovations taking 8 to 12 weeks…see before and after pics below, of a recent renovation.
As you can see, when doing a renovation or a development, it’s the Cash on Cash Return or ROE that you really need to be aware of.
Let me bring you in on a little secret, the more you can borrow from a lender, the bigger the % return/profit you will achieve on your cash investment.
I can categorically say, there is no business investment, stock market investment or high yielding bank investment account which can provide you with the cash on cash returns in the above time frames, as property renovations or developments.
The returns I describe above are not pie in the sky returns but, returns which my wife and I constantly achieve with our developments and renovations.
But you need a successful system and strategy to follow. You cannot afford to risk money nor the time trying to figure things out by trial and error.
You cannot just wing it and you certainly cannot count on the many property investment schemes that are advertised and promoted out there.
You must take control of your destiny and never hand over your hard-earned money to others to invest for you.
Learn what to do for yourself. Learn how to do it for yourself. Just like I did. It’s possible.
Stay tuned in to my future posts as I try and share more insights on how to go about doing it for yourself.