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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Auctioned off today in norwalk Posted by Steve-CA on October 05, 2006 at 10:15 PM In Reply to: Re: Auctioned off today in norwalk posted by JK (the other JK) on October 05, 2006 at 6:02 PM : : You can make $10k just by leaving your $400k in an fdic insured savings account. : : Compared to the time, work and risk to get $30-40k, I'll take an easy $10k and watch tv. : : Dave : You are not taking into account leverage. Although you should be able to get $20K off the money with a CD over 12 months, it will only be insured up to $100K and you would be using all $400K. The average deal time is around 6 months so can make $80K off the $400K using OPM (Other Peoples Money). My computation was including the costs of the financing. So if you could do 25 Deals with $40k net profit you'd make $1,000,000. You could buy 4 CDs each of $100K, different banks if you had to, and get the same $20K annual return and it will all be insured. So I'm not sure what point you were maybe making about the banks being risky, but I do agree with you that leverage is the key to real estate; $400K can buy several million dollars worth taking advantage of OPM. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : : You can make $10k just by leaving your $400k in an fdic insured savings account. : : : Compared to the time, work and risk to get $30-40k, I'll take an easy $10k and watch tv. : : : Dave : : You are not taking into account leverage. Although you should be able to get $20K off the money with a CD over 12 months, it will only be insured up to $100K and you would be using all $400K. The average deal time is around 6 months so can make $80K off the $400K using OPM (Other Peoples Money). My computation was including the costs of the financing. So if you could do 25 Deals with $40k net profit you'd make $1,000,000. : You could buy 4 CDs each of $100K, different banks if you had to, and get the same $20K annual return and it will all be insured. So I'm not sure what point you were maybe making about the banks being risky, but I do agree with you that leverage is the key to real estate; $400K can buy several million dollars worth taking advantage of OPM. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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