What Is The Average Return On Real Estate Investment?

What is the average return on your real
estate investment? This really good question.Aand I got it recently and
there’s 2 ways for me to look at it. The first one is, what can I expect from
real estate if I invest in it and the other way to take it is how do I
actually calculate my ROI? So today you get a boom! Double bonus and we’re going to
do both of those. Let’s answer the first question. I mean
what kind of return can you expect from real estate? Usually the person asking
that question has money in the stock market 401k and IRA and I have to tell
you that it comes down to the operator more than the property because some
operators know how to produce 5 or 6 or 7% real estate. And
from that perspective it looks like the stock market. But some of us know how to
produce 25 or 30%. I know how to in time produce 50%, a 100% and 200% and a thousand percent
and 10,000%. Now I lost all my credibility because you’re like,
“Whatever, jokester. I’m leaving.” But hang, hang tight for a second. So, I’ve done
4,000 projects. My name is Kris Krohn. For those you that don’t know. If
you’re not you need to be a subscriber to the channel because everyday, I’m
sharing with you the real scoop on how to become financially free as soon as
possible. Live life on your terms and unleash your financial destiny. Let me
just tell you that when I started doing real estate I was doing 20, 30%. But then I learned how to tap into real estate with much higher ROI’s.
As far as the actual dollar itself goes like investing. If I… Let’s say I’m
buying 150,000 dollar house and it’s a 20% down payment.
So, let’s say I put $30,000 into the property. That’s what 20% is. If I’m a
typical person doing backyard real estate, honestly 6, 7, 8 percent
is very very normal. I teach a strategy for the backyard called lease options or
for those that want to be hands-off, I take them into the best markets
nationwide for high ROI rentals. And in both of those strategies, I can usually
pound out a solid average 25%. Which means that I’m doubling my money every
4 years. From that point of view, that’s why I love real estate. That’s why
I have a hard time putting my money in anything else. I love putting it in
alternative investments. But usually not the stock market 401k, IRA. It’s just not
my deal even though that’s what’s taught. Normal, standard and accepted. Let’s talk
about however how you actually calculate your ROI. For those either were
interested in the first answer, click the link in the description below. Get with
the member of my team. And will actually show you sample deals I’m doing right
now. Where you can find out, “Hey, 25%. Man, that’s got to be a random fluke deal.” No,
I can show you that on my last 3,000 properties. But what I want to do right
now is for those of you that watch the top of this video because he said, “Kris,
actually wouldn’t know how to calculate my ROI.” let’s go back to that example. I have a house that has a value of 150,000. If I’m putting a standard 20% down. Then that
means that’s roughly 30 grand. So, whether I get my thirty grand out of my
401k, IRA stock market, home equity from my primary residence or whatever. I’m
going to take that 30 grand. And if I put it into a property, I got a nice simple
equation here. Calculating ROI is the most important calculation that you need
to know how to do. So, I’m going to put my calculator. I’m going to do it with you
right now. We’re going to assume in this example that I put 30 grand in. And let’s
just say that I got 30 grand back out. So, I doubled my money. What we’re going to do
is we’re going to take my profit which if I double my money,
check this out. We know that we made $30,000. And then it says
over here, we need to divide that by the money that
we put in in this case. It also just happens to be $30,000.
And you would expect that 30 thousand divided by itself is 1.
But now, the equation says over here, we need to multiply that by 100 to
figure out the percent. So, times 100. And we made 100% on
our money. But the deal took 5 years. So, I need to divide it by the number of
years which is 5. Made 20% of my money on that deal. Let’s do it one
more time a little different. Same deal. I found a home for 150,000. I put 20% down, 30 grand. Maybe it came from my 401k, IRA and uncle
and niece or something. Let’s say on this one we made $50,000. So
now, I’m going to take 50,000. Then I’m going to divide it by my investment and
I get 1.6666667. Then I’m going to multiply that by
100. And it says lo and behold. I made 166%
return on my money. But it took me 6 years to do it.
So, I’m going tO divide that by 6. And my ROI is 27.7%.
Just between you me and the wall, if I’m not doing 25%, I kind of feel a
little bit let down. As a bonus before we in this video, I want to share just kind
of something a little cooler. 2 things that I think are actually fairly
mind-blowing. Here’s the first one. What happens if you sold this house and you
made 30 grand and then you put it into 2 properties. So, I did this deal
with 150. Put 30 grand in. 5 years later,
sold it. Made my 20% ROI. But now, I take my 30 grand of my original downpayment.
And my 30 thousand a profit and I put them both here. Basically, I took one home
and turned him into 2. But on the same original dollar. On the original dollar,
if I was earning 20% before and if I’m going to earn the same ROI, I’m now going to
make 40% on my money. Why? Because I doubled and now I’m going
to double it again. And this is how you can get up to 100%. And I’ve
been doing this for 15 years. So on some of my investments, I’m now earning
hundreds of percents. But then I’m going to show you one final bonus. If you use OPM.
Have a partner that says, “Kris, you’ve got an awesome track record. Let me put
up the money. And you do all the hard work. You do the heavy lifting. You find
the deal. Sick your team on it. Make it happen.” I’ll put up the money. We call
that OPM –Other people’s Money. If you put no money in and you buy 5 homes with
this partner and you make 300 thousand a profit. Make it 150,000 and you get 150,000, how do you calculate your
ROI on getting 150,000 but putting no money in? Well
technically it’s an infinite ROI. So then the only thing that you can do to really
calculate it is then to say, “Well, let’s look at how many hours I put in it and
then you can start calculating what your time is really worth.” So, my friend. I hope
that was useful for you. If you want to know, what can you expect in real estate?
It depends. If you’re a novice, if you’re an expert 25% work with my team. Or if
you wanted to know how to calculate ROI, we took care of that as well. So thank
you so much for watching. Hope you enjoyed it.
Get your hands on a free copy of my book. Get a consultation talk to my team say, “I
want a free game plan. Kris said I can have one.” And what that entitles you to
is my team stepping into your shoes and saying, “Awesome. If Kris were you, what
would he do today to make his next million dollars. And whether you’re
deeply in debt or you’re ahead of the curve, Kris is going to show you your
next moves in real estate.” Thanks for watching. Subscribe. See you tomorrow.

9 thoughts on “What Is The Average Return On Real Estate Investment?

  • I think returns and results can vary but real estate is definitely one of the best investments if you can figure it out!

  • I think there's a problem with doubling the property after you made your profit as real estate prices will go up simultaneously with the years. So how do you except to get a house with a 30k investment in 5 more years

  • Why hello there friend!!! Aha… Mi amigo, I found your channel today actually, and I wanted to say… You're speaking skills in front of a camera are amazing no doubt about it!!! 💪😉👍

  • Love the content Kris! I've been watching tons of your videos because I didn't know a thing about real estate other than my experience with buying my current house. I am averaging about 3 hours of your videos everyday and getting more confident and knowledgeable and I'm excited for what lies ahead!

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