What is the average return on your real estate investment? This really good
question.Aand I got it recently and there's 2 ways for me to look at it.
The first one is, what can I expect from real estate if I invest in it and the
other way to take it is how do I actually calculate my ROI? So today you
get a boom! Double bonus and we're going to do both of those.
Let's answer the first question. I mean what kind of return can you expect from
real estate? Usually the person asking that question has money in the stock
market 401k and IRA and I have to tell you that it comes down to the operator
more than the property because some operators know how to produce 5 or
6 or 7% real estate. And from that perspective it looks like the
stock market. But some of us know how to produce 25 or 30%. I
know how to in time produce 50%, a 100% and 200%
and a thousand percent and 10,000%. Now I lost all
my credibility because you're like, "Whatever, jokester. I'm leaving." But hang,
hang tight for a second. So, I've done 4,000 projects. My name is Kris
Krohn. For those you that don't know. If you're not you need to be a subscriber
to the channel because everyday, I'm sharing with you the real scoop on how
to become financially free as soon as possible. Live life on your terms and
unleash your financial destiny. Let me just tell you that when I started doing
real estate I was doing 20, 30%. But then I learned how to tap
into real estate with much higher ROI's. As far as the actual dollar itself
goes like investing. If I... Let's say I'm buying 150,000
dollar house and it's a 20% down payment. So, let's say I put $30,000 into the
property. That's what 20% is. If I'm a typical person doing backyard real
estate, honestly 6, 7, 8 percent is very very normal. I teach a strategy
for the backyard called lease options or for those that want to be hands-off, I
take them into the best markets nationwide for high ROI rentals. And in
both of those strategies, I can usually pound out a solid average 25%. Which
means that I'm doubling my money every 4 years. From that point of view,
that's why I love real estate. That's why I have a hard time putting my money in
anything else. I love putting it in alternative investments. But usually not
the stock market 401k, IRA. It's just not my deal even though that's what's taught.
Normal, standard and accepted. Let's talk about however how you actually calculate
your ROI. For those either were interested in the first answer, click the
link in the description below. Get with the member of my team. And will actually
show you sample deals I'm doing right now. Where you can find out, "Hey, 25%. Man,
that's got to be a random fluke deal." No, I can show you that on my last 3,000
properties. But what I want to do right now is for those of you that watch the
top of this video because he said, "Kris, actually wouldn't know how to calculate
my ROI." let's go back to that example. I have
a house that has a value of 150,000. If I'm putting a
standard 20% down. Then that means that's roughly 30 grand. So,
whether I get my thirty grand out of my 401k, IRA stock market, home equity from
my primary residence or whatever. I'm going to take that 30 grand. And if I put it
into a property, I got a nice simple equation here. Calculating ROI is the
most important calculation that you need to know how to do. So, I'm going to put my
calculator. I'm going to do it with you right now. We're going to assume in this
example that I put 30 grand in. And let's just say that I got 30 grand back out. So,
I doubled my money. What we're going to do is we're going to take my profit which if I
double my money, check this out. We know that we made
$30,000. And then it says over here,
we need to divide that by the money that we put in in this case. It also just
happens to be $30,000. And you would expect that 30
thousand divided by itself is 1. But now, the equation says over here, we
need to multiply that by 100 to figure out the percent. So, times 100.
And we made 100% on our money. But the deal took 5 years.
So, I need to divide it by the number of years which is 5. Made 20%
of my money on that deal. Let's do it one more time a little different. Same deal. I
found a home for 150,000. I put 20% down, 30 grand.
Maybe it came from my 401k, IRA and uncle and niece or something. Let's say on this
one we made $50,000. So now, I'm going to take 50,000. Then
I'm going to divide it by my investment and I get 1.6666667.
Then I'm going to multiply that by 100. And it says lo and behold. I
made 166% return on my money. But it took me 6
years to do it. So, I'm going tO divide that by 6. And my
ROI is 27.7%. Just between you me and the wall, if I'm
not doing 25%, I kind of feel a little bit let down. As a bonus before we
in this video, I want to share just kind of something a little cooler. 2 things
that I think are actually fairly mind-blowing. Here's the first one. What
happens if you sold this house and you made 30 grand and then you put it
into 2 properties. So, I did this deal with
150. Put 30 grand in. 5 years later, sold it. Made my 20% ROI. But now, I take
my 30 grand of my original downpayment. And my 30 thousand a profit and I put
them both here. Basically, I took one home and turned him into 2. But on the same
original dollar. On the original dollar, if I was earning 20% before and if I'm
going to earn the same ROI, I'm now going to make 40% on my money.
Why? Because I doubled and now I'm going to double it again. And this is how you
can get up to 100%. And I've been doing this for 15 years. So on some
of my investments, I'm now earning hundreds of percents. But then I'm going to
show you one final bonus. If you use OPM. Have a partner that says, "Kris, you've
got an awesome track record. Let me put up the money. And you do all the hard
work. You do the heavy lifting. You find the deal. Sick your team on it. Make it
happen." I'll put up the money. We call that OPM --Other people's Money. If you put
no money in and you buy 5 homes with this partner and you make 300 thousand a
profit. Make it 150,000 and you get
150,000, how do you calculate your ROI on getting 150,000
but putting no money in? Well technically it's an infinite ROI. So then
the only thing that you can do to really calculate it is then to say, "Well, let's
look at how many hours I put in it and then you can start calculating what your
time is really worth." So, my friend. I hope that was useful for you. If you want to
know, what can you expect in real estate? It depends. If you're a novice, if you're
an expert 25% work with my team. Or if you wanted to know how to calculate ROI,
we took care of that as well. So thank you so much for watching. Hope you
enjoyed it. Get your hands on a free copy of my book.
Get a consultation talk to my team say, "I want a free game plan. Kris said I can
have one." And what that entitles you to is my team stepping into your shoes and
saying, "Awesome. If Kris were you, what would he do today to make his next
million dollars. And whether you're deeply in debt or you're ahead of the
curve, Kris is going to show you your next moves in real estate." Thanks for
watching. Subscribe. See you tomorrow.