Deploying capital at attractive rates of return quickly

[Ian Reynolds]

Real estate seems to me to have a lot of correlations to investing in lower middle-market businesses. Many people have described the process of investing in realestate as being a slow way to build wealth. Having spoken with a number of real estate investors I can understand that. However, it appears that folks with enough financial savvy and a little luck are able to build a portfolio rather quickly. 

What is the reasonable rate that capital can be deployed into a major market and achieve 20-30% rates of return on cash? It appears that multi-family is the best way to deploy larger sums. But because those opportunities are few and far between, holding cash may be inefficient. 

What has been your experience in how quickly you can deploy funds? For someone who wanted to take capital from their primary business how quickly could they transition to real estate? 

[Andrew Hogan]

True, there are more SFH opportunities than MF. Even then, I believe there is still an overabundance of multifamily opportunities... Relationships.

Regarding those returns, I'd definitely look at different strategies from a risk-adjusted return perspective. If you're focusing on your biz and deploy those funds passively it will obviously take longer but you'll get the experience of your partner and their team. If you're looking to do it yourself you may achieve it much quicker but with a higher risk of losing your hard-earned dough.

@Ivan Barratt recently spoke about this topic:

"I would tell you to focus 100% on starting and growing your biz first. Down the road, you can use the cash flow from the biz to buy your real estate. Rich Dad Poor Dad "The Cash Flow Quadrant" breaks down this formula quite well. As an example, Robert Kiyosaki did NOT get wealthy via real estate. He got wealthy via growing an education company. Then, he used the funds from the biz to buy income-producing assets. Look behind the curtains and most "real wealth" has been built this way. Focus on the B quadrant first. :)"

Source: https://www.biggerpockets.com/forums/432/topics/823961-syndication-investing-during-a-recession?page=7#p4904659