I recently watched a youtube video from robert kyiosaki rich dad poor dad called infinite return. It leaves a lot of info out such as gross rental income, what kind of loan ie interest only or other etc. Can anyone comment on this strategy of real-estate investing. Do you think think they even intend to pay it off or not. Would they have the option replicating the strategy on another project and using the dividends from that to pay off the original project?
Based on Ken Mcelroy’s book (who is also Robert Kyiosaki property partner) he doesnt put his own money into these deals instead uses investors. How then does he make his money ie is it by taking on the managment of the property and charging for his services, is it commission based, part ownership or something else? Is the interest rate on deals like this typically higher than a home loan how much do you think they typically pay?
since a lot of figures have been left out I know its hard to determine what is going on 2but your input would be appreciated. Please see below for youtube video http://m.youtube.com/?reload=2&rdm=17wc8xky#/watch?v=v9YZAA9dwxc
Hi Zojieen,
Welcome aboard – that is an interesting bunch of questions you have put to us. I attempted to see what you were watching.
Your link didn’t go to a specific RK video, but I went looking and watched two that I found.This one (8 minutes long) :-
..does add a few figures. From that, it appears he pops in some of his own money, but also money from other investors.The project started as a large apartment block with adjacent land. He added an extra 100 apartments on the land, then refinanced to get the Bank’s money to pay out him and the other investors. It appears $100 a month was “spare cash” from each of the 250 apartments. So they wind up with an investment that returns $300k per year, with none of their own cash in the deal any more.
On the surface, it sounds workable to me. Though $100 a month isn’t earth-shattering, if an investor had put in 10% of the original investment, his passive income is $2500 a month with all costs covered, and his original investment back in his bank (or re-invested elsewhere). Seems to me there is no intent to repay the loan – so maybe they are using “Long-term Fixed” loans to lock in their monthly costs.
Maybe others can add a few more pointers (my knowledge of this kind of investing is minimal),
Benny
You must be logged in to reply to this topic. If you don't have an account, you can register here.
