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Updated over 9 years ago,
Why is REI so popular if it takes YEARS just to break even?
I've really wanted an answer as to whether real estate is a get rich slow endeavor, and after watching Brandon's video on How to Quickly Analyze a Property Deal it seems to be the case
https://www.youtube.com/watch?v=XW_9AUsdPC0
Brandon invests $30,000 into a 4-plex and ends up with a net cash flow of $4,020 a year. At that rate, it will take him 7.5 years just to break even. Sure, he may end up with more because of appreciation/tax benefits...but still almost Seven and half years?!
During that same amount of time, you could've invested $5,000 into a software business and scaled it up to $10k monthly recurring revenue or $100k a year in less than 6 months (very hypothetical, but you get the point).
Sure, you can get higher cash on cash return percentages for larger size deals, but it still takes so much more time to get a return (since your investment dollar amount also grows in proportion)....
I was really interested in learning more about investing in multi family deals, until I came to this realization. Does anyone have any objections? It really does seem like real estate is a slow man, or woman's, game (at least compared to other sources of building cash quickly like starting a software business)
Really hope I don't come across as a troll...but I'm just deeply turned off by this.