How would you turn $500,000 into 5 million in 5 years?

88 Replies

A serious question indeed! 

We all watch videos, read books, and attend seminars.. Right? We love it in fact! You could probably answer that question rather quickly without much thought (especially if you are a seasoned pro).. but I would like you to really give it some serious thought..and work the numbers. Is it possible? 

I will add a scenario to help you decide..

Your great great uncle dies and leaves you $750,000. His only stipulation is that you use $500,000 of it to invest in real estate and gives you a timeline of 5 years to turn it into 5 million or you will lose the money and it goes to your cousin, Joe. You jump for joy, quit your job and begin... so how would you turn $500,000 into 5 million? Doable? 

If you truly can figure this out for yourself...you will then be able to take any amount of money and turn it into pot of gold(for yourself). What is your plan!?

@Account Closed . First thing I’d do is call my cousin Joe and split the money with him, instead of losing it all in 5 years, because that’s what would happen 99.99 percent of the time in this situation

Everyone would love to be able to 10x their capital in 5 years, LOL.

When you figure it out let us all know so we can follow your proven path.

Until then I'd suggest learning everything you can about value-add multifamily and focus on more realistic goals.

I appreciate your feedback Brian! Unfortunately, there is no one "proven path", no one way for all.  That is impossible; there are too many different variables in everyone's lives to have it one way...That is the beauty and the challenge at the same time. I am sorry, I can't agree with "realistic goals". That equals limitations for me and with real estate you must be able to think outside the box of "realistic goals " sometimes and take a chance. Otherwise, we are like everyone else looking for the one proven path.;-) and playing it safe.

@Account Closed the realistic way to make this happen is venture capital, betting say 50k on 10 companies and hoping one becomes the next Uber/facebook etc.

if none of them do you’ll lose it all. Realistically the stock market, real estate and pretty much every other main form of investing will not allow you to achieve this goal

Originally posted by @Caleb Heimsoth :

@Monique ODell. First thing I’d do is call my cousin Joe and split the money with him, instead of losing it all in 5 years, because that’s what would happen 99.99 percent of the time in this situation

🤣 I have to agree with this. You're talking about 1000% return in 5 years. That's about 200% annually, or maybe a little less on the front end if you want to think about compounding. Think about virtually any investment that's "a sure thing" and think about the level of return you can reasonably expect to see in a year. No way you're going to make this happen without investing in some serious runaway growth speculative ventures. If I had to do it, no way around it, I'd probably be looking at something in an expanding market overseas - Vietnam, Indonesia, someplace like that. Those are the only kinds of places you might reasonably hope to see growth like that and count on it being there 5 years from now. 

Originally posted by @Account Closed :

Remember.. I never said 5 million cash. I just said 5 million (so that can be 5 million cash/assets!)

Still extremely unlikely. 

I think it is very possible if you truly want to work hard enough. You only need to purchase the right properties and earn enough to double your investment capital every year. I wrote a post about a Japanese girl who with no money and no job made $2.3million in 7 years. Since 2001 I made more than $30 million and real estate takes less than 5% of my time.

From what I've seen, that's an extremely unlikely proposition to fulfill. Like @JD Martin mentioned, thats 200% return a year. Now if you only had 30k, I could see you turning that into 300k in 5 years, MAYBE, with a lot of hustle and a little luck with some appreciation. But going from 500k to 5 million is a different story. Call up cousin Joe and split it lol. 

Originally posted by @Account Closed :

Remember.. I never said 5 million cash. I just said 5 million (so that can be 5 million cash/assets!)

 True that...you said turn $500,000 (Five hundred thousand dollars) into 5 million (no specification). If you go by today's conversion factor, we've already blown past the 5 million peso mark (9.5 million pesos or so today). Or we can get real fancy with 2 billion Cambodian riels 😜

Originally posted by @Account Closed :

Thank you Jack. I know it is possible (I have seen it as well) and it starts with believing it is possible!

Oh! Well, if you've seen it, that's easy - just do what they did! No point in asking us for the answer when you already have it, unless the question was rhetorical in the first place and you're going to reveal "The Secret" 😁

Originally posted by @Daniel Kong :

From what I've seen, that's an extremely unlikely proposition to fulfill. Like @JD Martin mentioned, thats 200% return a year. Now if you only had 30k, I could see you turning that into 300k in 5 years, MAYBE, with a lot of hustle and a little luck with some appreciation. But going from 500k to 5 million is a different story. Call up cousin Joe and split it lol. 

It's actually only 58% return per year. This is actually achievable CoC return in the commercial space if you get incredibly lucky. Maybe if you have some sort of favorable promote structure with an equity partner. Definitely not something a new entrant could achieve.

Originally posted by @Frank Jiang :
Originally posted by @Daniel Kong:

From what I've seen, that's an extremely unlikely proposition to fulfill. Like @JD Martin mentioned, thats 200% return a year. Now if you only had 30k, I could see you turning that into 300k in 5 years, MAYBE, with a lot of hustle and a little luck with some appreciation. But going from 500k to 5 million is a different story. Call up cousin Joe and split it lol. 

It's actually only 58% return per year. This is actually achievable CoC return in the commercial space if you get incredibly lucky. Maybe if you have some sort of favorable promote structure with an equity partner. Definitely not something a new entrant could achieve.

can come close in building new communities..  we took 600k and turned it into 2.2 million NET  in 18 months..  but the drag between doing that deal and setting up the next one usually makes the time lines too tight to do it in 5 years.. given cities and building schedules and all. and I am sure there are other larger syndicator types that do pretty well but not sure that well with only 500k in cash.. 

Why are you setting your goals so low? Why not ask how you can turn $500k into $500 million in five years?

Not sure what the point of this post is. It is highly unlikely. Not impossible but wouldn’t want to bet on it.

You'd have to swing for the fences. I'd go all-in with Cannabis and venture capital funds.

Originally posted by @Daniel Kong :

@Frank Jiang Ahhh, I didn't check the math. That "only" 58% is a lot more reasonable. Still very tough though. 

@Jay Hinrichs Exception to the rule. If your name is Jay Hinrichs, this is entirely possible lol. 

for new construction home builders this is pretty common returns frankly..  the key is scale. 

The question is not rhetorical. There are many investors who can turn $500k into $5 million in 5 years. It is very possible, but the probability that you will succeed is low. But, what if you had the right business model, your ducks are lined up in a nice neat row and you made only $4 million, or $3 million, or $2 million. As someone just posted; if you can't see yourself doing it then it is because you don't know how and it won't happen.

I sound like a broken record and keep repeating the same thing in almost every post. The way it is done is by analyzing thousands of properties for single-families, multiple-units, auctions, rehabs, and the sample that was posted yesterday by someone who purchase 6 (I think it was 6) units near USC College and the ROI was 85% in 18 months (I think it was 18).

What I've been trying to do is to put together is a Think Tank where investors are willing to come to my office, if possible, where  everyone works together. I have the computer tools to do a massive amount of data mining in a short period, the software to crunch the numbers, the drive and the time, but more brains are always better than one. I don't want to be anyone's partner. My idea is that everyone can share the tools, bounce knowledge off each other and everyone does their own deal. 

id spend 100$ on mega millions lotto tickets and cross my fingers ...the rest of the money would be equally invested on mad dog booze ,Newport cigarettes and toothless prostitutes