Does a gumball machine profit more than the average SFH rental?

Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes

No it does not... however four gumball machines might. Is what you are thinking of buy and holding make more profit than four gumball machines? This post is to get a new investor to take a step back and consider what makes your SFH investing more profitable than 4 gumball machines.( Especially those out of state investors) Is it the location? Is it the cash flow future potential? Why would you invest in that SFH rental if just 4 gumball machines equal the returns and without the liabilty and possible extra expenses?

Thoughts and comments?

1 Reply

151 views

Most Popular Reply

Mike CumbieBusiness Member

REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes

10y

@Kevin Fox

Don't be a bubble popper here or the situation could get sticky....... :)

7 Reply

See this reply in the discussion

30 Replies

Jump to latestLatest

Sort by

Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
10y
You must be talking about some fancy gumball machines!!!
[email protected]Podcast Guest on Show #301
1 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Alexander Felice Just the regular type. The fancy ones can make more than one sub 100k SFH rental maybe.
0 Reply
Alexander FelicePro Member
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
10y
I would love to hear this sales pitch.
[email protected]Podcast Guest on Show #301
2 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Alexander Felice that's funny and I would too. More of a philosophical question vs sales pitch perhaps. If you are local to these SFH rental vending routes this post might not apply much. I can assume you are not in this population.
0 Reply
Account Closed
Indianapolis, IN · Member since 2015 · 15 posts · 14 votes
10y
How much equity are in these gumball machines that I can leverage for more gumball machines?
7 Reply
Account Closed
Indianapolis, IN · Member since 2015 · 15 posts · 14 votes
10y
Can I trade up to a better gumball machine tax free using 1031?
4 Reply
Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
10y
@Account Closed,
You could reinvest the profits into a "Crane Machine" though and that's where the money really starts flowing :)
4 Reply
Account Closed
Indianapolis, IN · Member since 2015 · 15 posts · 14 votes
10y
@Mike Cumbie,
Good idea. It would be like owning a REI guru company! Selling false hopes!
3 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Account Closed I am not actually in the gumball business but I imagine there are the regular write offs. They do sell routes for some decent exits still. But no 1031s, and good point for REI.
1 Reply
Kevin FoxPro Member
Real Estate Agent · San Diego, CA · Member since 2014 · 1k+ posts · 635 votes
10y
For those of us not as well versed in gumball machine investing, could you please expand a little on the assumptions you are making about the "average" annual profit of each?
I have no experience in the world of HubbaBubba, but the idea seems laughable at best.
If I'm not mistaken, you do not gain valuable equity each month in your gumball machines, nor do those gumballs have any potential for future appreciation. (No, not even the red ones)
When you invest in stock, you should consider a lot more factors than just the monthly dividend. Why is Real Estate any different?
2 Reply
Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
10y
@Kevin Fox
Don't be a bubble popper here or the situation could get sticky....... :)
7 Reply
Jay Orlauski
Realtor · Fresno, CA · Member since 2013 · 471 posts · 225 votes
10y
can you use a REIT as your gumball machine? and would this hands off income producing opportunity pay more than a SFR? - a question I have pondered once or twice.
1 Reply
Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
10y
Isn't it all a about the location location location of the gumball machine?
The 1031 Investor5137 Reviews
Website View Page
4 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Kevin Fox I am not versed in the gumballs. From what I understand a regular one profits 20 to 40 a month. I would not normally compare to Cali RE on average to gumballs but maybe to random SFHs in less profitable markets let's imagine. This is not about gum vs REI as much as thinking in terms of business returns overall. And how that could apply to ones investment choices.
0 Reply
Kyle Grimm
Investor · St. Louis Mo · Member since 2015 · 211 posts · 129 votes
10y
When I was 7-10 years old, I saved up and bought 2 machines off of eBay for about 200$. I put one at my dad's office in the lobby, and another at a camp ground. I like to say it's what influenced my love for passive income! It was a great learning experience keeping track of my profits as well as buying bulk candy offline.
Not sure if it's as good of an investment as a SFH but it's a great learning experience!
5 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
10y
My buddy own a campground , he has 5 gumball machines with gumballs and 5 gumball machines near the pond with ducks that have food for the birds in them . 25 cents per turn , no electric . The vanity tag on his truck ...............FISHFD
3 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Matt R. vending business is much like low end SFR rentals.. price to enter is the same and income is about the same.. low end rentals we know will not appreciate but a vending route was set up could have substantial equity as someone would buy a ready made business with cash flow. There is a lot more to vending than bubblegum machines.. those who have softdrink machines in colleges and in high rise offices make a KILLING far better than any rental that's is for sure.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Richard Dunlop
Investor · Detroit, MI · Member since 2014 · 755 posts · 462 votes
10y
My first Asteroid game brought in more than $300 PER WEEK!
2 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Jay Hinrichs I imagine a good vending machine that cost 5k in a good location makes $1000 per month. A college campus could be in the $100 a day range. These are guesses. I remember the one in college and the dude was consistantly stocking. They do sell some routes and they seem to be in the 100k+ price.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Matt R. its business. when I was young I had a vending route in 3 of my community colleges in San Jose I had Condoms machines... cost me about 300 per machine and they made about 50 to 75 a month per machine but I had to stock them. So it was a route once a week. then donated it to the college as my RE fired up.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
2 Reply
Matt R.
OP
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
10y
@Jay Hinrichs That's funny. I remember those ones that were fixed to the wall. In that case just 3 machines for under $1000 could make as much flow. Adjusted for inflation your example beats many buy and holds head to head. It is raining quarters:)
1 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
10y
Originally posted by @Kyle Grimm:

When I was 7-10 years old, I saved up and bought 2 machines off of eBay for about 200$. I put one at my dad's office in the lobby, and another at a camp ground. I like to say it's what influenced my love for passive income! It was a great learning experience keeping track of my profits as well as buying bulk candy offline.
Not sure if it's as good of an investment as a SFH but it's a great learning experience!
Wow, man that makes me feel old - "When I was 7-10 years old, I bought 2 machines off of Ebay". At that age for me we were still using rotary phones, there were a handful of over the air channels, no video game consoles, and certainly no internet! Now I'm competing for real estate with guys who made their first deals as kids on ebay! Crikee!
Podcast Guest on Show #243
Skyline Properties
View Page
0 Reply
Andy Robison
Investor · Kansas City, MO · Member since 2013 · 465 posts · 170 votes
10y
Originally posted by @JD Martin:

Originally posted by @Kyle Grimm:
When I was 7-10 years old, I saved up and bought 2 machines off of eBay for about 200$. I put one at my dad's office in the lobby, and another at a camp ground. I like to say it's what influenced my love for passive income! It was a great learning experience keeping track of my profits as well as buying bulk candy offline.
Not sure if it's as good of an investment as a SFH but it's a great learning experience!
Wow, man that makes me feel old - "When I was 7-10 years old, I bought 2 machines off of Ebay". At that age for me we were still using rotary phones, there were a handful of over the air channels, no video game consoles, and certainly no internet! Now I'm competing for real estate with guys who made their first deals as kids on ebay! Crikee!
Don't worry... us youngin's still have plenty to learn from you old timers ;)
0 Reply
Jesse T.
Herndon, VA · Member since 2014 · 1k+ posts · 324 votes
10y
I think the vending machine analogy is a lot closer to SFH buy and hold investing than most would think at first.
Both businesses are going to be very dependent on location for profitability. Both businesses generally are going to have low(or no) margins if you completely out-source. I think with the vending machine route it is a little more obvious that it is both an investment and job.
1 Reply
Account Closed
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
10y
Originally posted by @JD Martin:

Originally posted by @Kyle Grimm:
When I was 7-10 years old, I saved up and bought 2 machines off of eBay for about 200$. I put one at my dad's office in the lobby, and another at a camp ground. I like to say it's what influenced my love for passive income! It was a great learning experience keeping track of my profits as well as buying bulk candy offline.
Not sure if it's as good of an investment as a SFH but it's a great learning experience!
Wow, man that makes me feel old - "When I was 7-10 years old, I bought 2 machines off of Ebay". At that age for me we were still using rotary phones, there were a handful of over the air channels, no video game consoles, and certainly no internet! Now I'm competing for real estate with guys who made their first deals as kids on ebay! Crikee!
I know. I was that age in the 1970s. Back when mail order seed sales seemed like a franchise opportunity.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.