IT’S TIME TO TAKE CONTROL OF YOUR RETIREMENT SAVINGS!
IF YOU HAVE A 401K OR AN IRA. YOU PROBABLY ARE DISAPPOINTED IN ITS LACK OF PERFORMANCE IN THE LAST SEVERAL YEARS
BUYING REAL ESTATE IN YOUR 401K
HERE IS HOW THE SYSTEM WORKED FOR US IN THE LAST 6 YEARS
We purchased a total of 7 homes from 2009-2012, all within a 2 mile radius, with an average cost including purchase price, closing costs and rehab of $120,000.
Our average total income from rents, after paying for taxes, insurance, repairs, maintenance, etc., has been $60,000 (and all of our properties are currently rented under value).
Therefore:7 homes x 120,000 buy-in…………………………..…….$840,000
$60,000 passive income per year for 6 years………………………..$360,000
Average yearly return……………………………………………………………….7.14% Average total return ………………………………………………………………42.85%
If you calculate the appreciation, the portfolio is now worth approximately $1,770,000, which is a 110.7% gain (18.45% per year), and coupled with the passive income is a whopping 153.35% return (over 25% per year)!
The present real estate market still offers far superior returns than you get from cash or probably your stock market investing. We just purchased another property, in the same neighborhood, and here is our projected income on that investment:
Purchase price + closing costs + minor rehab: $230,000
Gross rent of $1350 less insurance, taxes, maintenance and average one month vacancy (although our average is more like 1 month in 3 years): 11.715
That is a 5.09% passive return. If you conservatively estimate appreciation at only 5% per year (which we expect to be closer to 7%), you still obtain over 10%, far better, and far safer (in our opinion) than sitting in a bank or in the stock market!