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Old 02-24-2006, 08:02 AM  
John Marco
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Join Date: May 2005
Posts: 912
prosper.com looks great, but I don't think they take non-US lenders

in regards to hebrew.com, probably only thing worth doing is to redirect it to jdate.com or something, not worth $125k unless you are jewish and its sentimental value

In regards to real estate, commercial real estate values are a derivative of their net operating income everywhere in the world. If you buy in a stable market (read: not California if you're in the US) and hold for the long term, with 80% debt you will make a 20-30% return every year for the first five years or so. You will not lose if you buy a stable property in a 'boring' market and do not over-leverage yourself. With 20% down payment you should have about a 10% cash on cash return every year (not counting appreciation and mortgage paydown), which is more than enough to cover any contingencies. Medium sized apartment complexes are probably best (50 units) because with more tenants, there is less risk of losing enough to put you negative. The 10% cash on cash is the net after paying a good management company to run everything so you don't have to deal with it.

Breakdown of how you get 30% return for the first 5 years:

10% cash on cash from rents
10% from morgage pay down (2% is paid on mrtg balance per year, but you only put 20% down, so this magnifies your return)
10% for appreciation (2% appreciation per year from rent increases)

You will lose some money if you sell it in 5 years (probably 1 year's worth of gain) because of real estate commissions, but if you refinance and take your money out and buy another property, you can do it all over again. If you keep doing this in 15 years you will be rich.

p.s. or you could buy $200k worth of adwords and send to Webcams.com
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Last edited by John Marco; 02-24-2006 at 08:04 AM..
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