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It is often said that Real estate is not a “get-rich quick” scheme. Whilst we agree with that, it surely is a “get-rich consistently” scheme. What do we mean by that? Well, consistently investing in Real estate can produce some stellar effects. It takes times to build the momentum but once the flywheel is up and running, it sure as heck runs! And if one is smart about it, one can program the flywheel to keep on running without putting in a lot of effort or even no effort.
It is illustrative to look at some numbers. The attached spreadsheet walks through one hypothetical 10 year investment horizon and showcases the power of real estate investing. First, some assumptions: We assume that every year we initiate a fresh investment amount of 50k, a cash on cash yield of 8% on any investment and a 16% annualized return realized at exit. Please note that these numbers are very typical of the offerings we bring to our investors. Monthly cash flow is calculated as an 8% yield on the cumulative investment (net worth) in any given year. For instance, in the first year one starts with 50k leading to an annual cash flow of 4k (50k*8%) and a monthly cash flow of $333.33. As time passes and as one’s investment amounts grow, the monthly cash flow and the net worth grows. For instance, in year 6 the monthly cash flows stands at $2333.30 and the net worth at 300k. Here is where the magic happens now!. Come end of year 6, the investment we made in year 0 matures and so does our net-worth. In year 7, we invest 50k as usual but we get a 100k bump from that exit leading to a cash flow of $3000 and a net-worth of 400k. This repeats in the subsequent years as we reap the fruits of our investments. By the time year 10 ends, we stand at a monthly cash flow of $5000 and a net-worth of 800k! In the same phenomenon, If you invest 100k per year instead of 50k, at the end of Year 10, you will get 10k per month of cash flow and Net worth of $1.6 MM. Now, that is some snowballing! The question is if you are ready to take that first step. We cannot wait! Take the calculator for a spin and give us feedback. To your Wealth! - Zovest Team
17 Comments
9/16/2022 07:47:25 am
I am glad that you shared this article. I appreciate it a lot because I was able to gain lot of information. Worth to read. 3/11/2023 06:19:41 am
What do we mean by that Well, consistently investing in Real estate can produce some stellar effects. It takes times to build the momentum but once the flywheel is up and running, Thank you for taking the time to write a great post! 3/11/2023 12:31:32 pm
The real estate snowball effect and Why Selling Your Home Buy low and sell high. This sounds like a good strategy but I have a different view. Selling is bad for you in this market. 6/21/2023 11:22:07 am
But the truth is you don’t need an endless supply of cash in order to get your start in real estate, and you don’t need to rush out and buy an apartment complex as your first property. I’m so thankful for your helpful post! 6/23/2023 02:01:28 pm
The land compounding phenomenon and Why Selling Your Home Purchase low and sell high. This sounds like a decent system however I have an alternate view. Selling is awful for you in this market. 6/29/2023 09:25:22 am
The land compounding phenomenon and Why Selling Your Home Purchase low and sell high. This sounds like a decent technique yet I have an alternate view. Selling is terrible for you in this market. 6/29/2023 09:57:31 am
The compound interest snowballs every year. Selling a property generating twonty Five annual Roi is not a good financial decision. Keeping the property, renting it and pulling equity out to buy another property is a prudent approach to build long term wealth. 10/25/2023 12:47:51 pm
The land intensifying peculiarity and Why Selling Your Home Buy low and sell high. This sounds like a fair framework anyway I have a substitute view. Selling is dreadful for you in this market. Thank you for making this such an awesome post! 2/1/2024 10:11:01 am
Several people are disillusioned with real estate investing. It's simple to think that before you can start, you need to be extremely rich or, at the very least, have a ton of money stashed up and ready to be spent. However, the reality is that you don't have to start with an apartment complex as your first property or have a limitless amount of money to get started in real estate. Actually, the majority of regular investors begin modest and increase their holdings over time. The snowball effect is something you are already familiar with if you have ever created a snowman. 11/11/2024 06:54:34 am
Great post on the real estate snowball effect! I really appreciate how you broke down the concept of compounding returns and how steady, incremental investments can lead to massive wealth over time. It’s a powerful reminder that real estate can be a long-term strategy, not just a quick flip. I also love the emphasis on the importance of consistency and patience in building momentum. Looking forward to experimenting with the snowball calculator! Thanks for sharing this valuable insight. 11/12/2024 07:10:44 am
Great post on the real estate snowball effect! The concept of reinvesting profits to build wealth through multiple properties is a powerful strategy. It’s crucial to maintain a long-term perspective and understand the market dynamics to maximize returns. Your breakdown of how small gains can lead to larger investments really shows the potential for exponential growth in real estate. I’m excited to implement some of these strategies in my own portfolio. Thanks for the helpful insights! 11/13/2024 05:37:18 am
The concept of the real estate snowball effect is an intriguing strategy for building wealth. As you acquire more properties, the returns from rental income and property appreciation start to compound, accelerating your growth. It’s great to see this approach outlined, as it emphasizes the importance of smart investments and reinvesting profits. For those just starting in real estate, it’s an excellent reminder of how patience and persistence can lead to significant financial success. 11/14/2024 06:22:39 am
The blog post explains how the "real estate snowball effect" works, where small investments in properties can grow exponentially over time. By reinvesting profits, leveraging property appreciation, and acquiring more assets, investors can build significant wealth. The post offers valuable insight for those looking to scale their real estate investments strategically. 11/15/2024 06:18:02 am
The "real estate snowball effect" described in the blog post effectively demonstrates how small, strategic investments in property can grow over time into significant wealth. By leveraging the equity from each property to invest in more, it creates a compounding cycle of wealth accumulation. This is an insightful approach for investors aiming for long-term financial growth. 11/19/2024 06:24:16 am
This concept is brilliantly explained! Using compounding investments to grow wealth is a smart strategy, and this article makes it easy to understand. A must-read for aspiring investors. 11/20/2024 07:11:57 am
Explores how compounding investments in real estate can exponentially grow wealth through strategic reinvestments and leveraging equity. Leave a Reply. |
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