You get an equity loan and you draw out that equity (which is effectively creating another loan) so you’re borrowing that money from the bank. Now in mathematics anything divided by 0 actually equals infinity and so this is how we the idea of infinite return.īorrowing Against Existing Equity To Buy A Property Is One Way To Get An Infinite ReturnĪ really simple example of an infinite return is when you take an equity loan from another property you have. However if you haven’t invested any of your own money into a property and it’s generating $1,000 what you’re going to do is take $1,000 and divide it by 0. What we would do is 1,000 divided by 20,000 which is going to give us 0.05 of 5 %. Let’s say we get a $1,000 back from the investment and we’ve invested $20,000 into it. The reason this happens is in order to generate a cash on cash return what we do is we get the annual income or the annual profit that is derived from an investment and we divide that by the amount of money that we put into the investment. He’s not talking about infinite amounts of money and being infinitely rich, what he’s talking about is the fact that if you put zero dollars into a deal and all you use is other people’s money effectively your cash on cash return will be infinite. So that is not what we are looking at and not what Robert is talking about Let’s Be Clear: Not Infinite Amounts of MoneyĪlright Daniel let’s first explain what I think Robert Kiyosaki means when he says an infinite return on investment because really I don’t think there is such a thing as gaining infinite amounts of money. How then does he make his money? Is it by taking on the management of the property or commission or by part ownership? Is the interest rate on the deals like this typically higher than a home loan and how much do you think they typically pay? Not sure if you can answer these questions since a lot of figures have been left out but your input would be appreciated.”įirstly, Here is the Robert Kiyosaki video daniel was talking about. Would they have the option of replicating the strategy on another project and using the dividends from that to pay off the original project?īased on Ken McElroy’s book he doesn’t put his own money into the deals instead uses investors. Can you comment on this strategy of real estate investing and whether you think they ever intend to pay off this property or not. “I recently watched a YouTube video from Robert Kiyosaki from Rich Dad Poor Dad called “Infinite Return” it leaves a lot of info out such as gross rental income, what kind of loan interest only or other. But how do you get an infinite return on property as is it actually as good as it sounds? Getting an infinite return on property sounds amazing.
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