How much capital needed to make $200k a year

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How much capital needed to make $200k a year

Tj M.
Real Estate Investor · Reno, NV · Member since 2016 · 71 posts · 67 votes

How much capital would you need to raise to make a reasonable investment and make $200k a year. I not taking about getting some miracle deal or something out of the ordinary. Just a average or slightly above average investment that could be found in today’s world.

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Tim Bender
Real Estate Coach · Joplin, MO · Member since 2017 · 13 posts · 65 votes
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Our investment company makes $250k on each $50k we have invested in current holdings each year. We make a consistent average of 400% return on each dollar invested in real estate. BUT we only buy title defected properties, and spend an average of 10% of appraisal. Once you learn to cure title defects and strip liens, there’s an unlimited amount of properties to buy. Don’t run from title issues, educate yourself on curing techniques.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
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    @Tj M.

    If you assume 10% return you need $2M.

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  • Julius Chinn
    Member since 2020 · 104 posts · 54 votes
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    If you assume 30% return you need $700k.

    2Reply
  • Justin V.
    Rental Property Investor · Minneapolis, MN · Member since 2016 · 214 posts · 132 votes
    5y

    @Tj M.

    Looking like 25-30% plus closing costs invested in 4.9 million worth of properties for 200k annual net after debt service by my projections, so 1.6 million in equity/spendings.

    0Reply
  • Nick C.
    Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
    5y

    Keep $2M loaned out at 10%, there's $200k/year. 

    1Reply
  • Justin Thorpe
    Member since 2020 · 437 posts · 675 votes
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    @Nick C.

    I’d imagine this to be a high risk investment.

    0Reply
  • Tim Bender
    Real Estate Coach · Joplin, MO · Member since 2017 · 13 posts · 65 votes
    5y

    Our investment company makes $250k on each $50k we have invested in current holdings each year. We make a consistent average of 400% return on each dollar invested in real estate. BUT we only buy title defected properties, and spend an average of 10% of appraisal. Once you learn to cure title defects and strip liens, there’s an unlimited amount of properties to buy. Don’t run from title issues, educate yourself on curing techniques.

    31Reply
  • Julius Chinn
    Member since 2020 · 104 posts · 54 votes
    5y

    Selling option Premium will get you there.  If you want higher than normal SP500 dividend yields.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Tim Bender:

    Our investment company makes $250k on each $50k we have invested in current holdings each year. We make a consistent average of 400% return on each dollar invested in real estate. BUT we only buy title defected properties, and spend an average of 10% of appraisal. Once you learn to cure title defects and strip liens, there’s an unlimited amount of properties to buy. Don’t run from title issues, educate yourself on curing techniques.

    this should send your in box  spinning..  My Dads attorney always told me.. this was in the late 60s  Son you want to make money in real estate learn the court house and how to run title and understand title.  

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  • Tim Bender
    Real Estate Coach · Joplin, MO · Member since 2017 · 13 posts · 65 votes
    5y

    @Jay Hinrichs. I didn’t learn about titles until about 10 years ago. I’d been flipping for years but once I learn about title defects and how everyone runs when there is a title issue, it started me on a different path. At first I’d buy them and not worry about the defects, I was just cash flowing them but I’d only only paid pennies for the propertys. Then later I learn how to cure the issues and strip the liens so I could then flip them. That was a game changer. Profits per property sky rocketed. Best of all once we let everyone know that’s what we bought, we never had to look for properties again, everyone calls us.

    7Reply
  • Benjamin E.
    Investor · Chicago, IL · Member since 2017 · 72 posts · 13 votes
    5y

    @Jay Hinrichs I'm interested in learning more about this. Would there be any good books on it that you would be able to direct me to? Would be much appreciated.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y

    @Benjamin E.@Tim Bender   Ben,  Sounds like Tim is the expert here..  

    my courthouse studies were mainly related to finding hidden parcels and plat maps that got buried. 

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  • Alexander Szikla
    Real Estate Agent · New York City · Member since 2020 · 818 posts · 639 votes
    5y

    Depends.

    Depends on the asset class and geography and how well you manage. This will all affect the cap rate. 

    Depends on the debt to equity mix and the interest rate and the amortization schedule.

    Buying A+ property in an A+ market with a 4% cap rate with no debt equires $5M. 

    Buying a rundown property with a lot of value add that you can stabilize at a 15% cap rate and put down only 10% requires much, much less. 

    1Reply
  • Benjamin E.
    Investor · Chicago, IL · Member since 2017 · 72 posts · 13 votes
    5y

    @Jay Hinrichs I believe that there are a number of hidden parcels, if I am understanding correctly, spread out through Chicago. I have some specific ideas of types of properties that theyvare connected to. I know very little other than a dual parcel that I discovered and ending up picking up. But it made my mind start contemplating options, like splitting and selling or developing etc. Any books on that would totally interest me as well :) I wanna soak it all up.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    5y

    @Tj M.

    $2M on a 10% is a decent formula for a start.

    Goodluck 👏👍

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  • Sean H.
    Developer · NC · Member since 2019 · 211 posts · 112 votes
    5y

    Not sure if youre talking about active or passive investing. I do most of my own work on my flips, and if i do either one big one or three subsequent small ones, ill make that in a year with just 200k invested at a time. 

    2Reply
  • Patrick Isaiah
    Flipper/Rehabber · New Orleans, LA · Member since 2019 · 10 posts · 6 votes
    5y

    @Tim Bender I would love it if you can post some strategies you use for your curing techniques

    4Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    @Tj M. If you’re looking for something passive, a $7M portfolio of dividend stocks will spin off $200k/yr. plus ~$700k gains.

    1Reply
  • Bryce V.
    Member since 2020 · 7 posts · 0 votes
    5y

    @Tim Bender what’s a good place to start on that? As a newcomer looking for a first buy I feel like it would be a good option for me to get my feet wet.

    0Reply
  • Tim Bender
    Real Estate Coach · Joplin, MO · Member since 2017 · 13 posts · 65 votes
    5y

    @Bryce Vanmeter the very first thing is to learn about basic title searching and what causes clouds. There are a few books on title searches out there, look under title abstracting, and a couple of web sites if you google them. Each state is a little different. Then start reconstructing title searches that you’ve had completed in the past with issues. Try to replicate them from scratch.

    3Reply
  • Josiah Cooper
    Real Estate Agent · Huntsville, AL · Member since 2015 · 60 posts · 17 votes
    5y

    @Tim Bender

    Any resource/book recommendations regarding this?

    Thanks

    0Reply
  • Gage Ealey
    Rental Property Investor · Baltimore, MD · Member since 2020 · 11 posts · 6 votes
    5y

    @Tim Bender what is the pricing for you title courses?

    0Reply
  • Conor Shinnick
    Rental Property Investor · Mooresville, NC · Member since 2016 · 19 posts · 15 votes
    5y

    @Tj M. We net just short of $200k with our two short term rentals. We put down about $250k plus some rehab costs.

    2Reply
  • Joshua D.
    Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Conor Shinnick

    Wowzer! That's awesome man! Where are the located?

    0Reply
  • Julius Chinn
    Member since 2020 · 104 posts · 54 votes
    5y
    Originally posted by @Bryce V.:

    @Tim Bender what’s a good place to start on that? As a newcomer looking for a first buy

    0Reply
  • Nelson Sandidge
    Rental Property Investor · Cartersville, GA · Member since 2019 · 11 posts · 7 votes
    5y

    @Tim Bender thanks Tim. I stumbled upon this post just from the question and your comment was the most valuable to me. I'm interested in learning more about title. Do you have other posts where you give more detail? I would love to hear more from you.

    0Reply
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