Stocks and gold as investments have specific documented track records. Companies that report specific stock and bullion prices are industries unto themselves. Trillions of dollars are invested in stocks and gold. Why would anyone compare real estate wholesaling to investing in stocks or gold?
The main comparisons of these investment vehicles fall into a couple of categories. Let’s start by looking at what have been the results of a long-term investment in each one.
Cost and risks to invest in each investment: Gold – Generally 100% of the amount purchased is required to buy gold, unless leveraged by buying options (100% loss risk) or borrowed money. The risk in gold investing is that it is a commodity and wild price swings can ensue causing more than an initial investment if the purchase was leveraged. Stocks – Generally 100% of the purchase price is required to buy stocks, unless margin is used and then 50% is required. The risk is virtually 100% of the investment as many stocks have literally dissolved in value. If margined, the loss could be more than the original investment.
- Real Estate Wholesaling – If done properly, the amount of money required to contract and sell a $100,000 property could be from $10 to $1,000. The maximum risk is the amount of the deposit in wholesaling. How much money can you make in each investment with a very small investment of $1,000 and not having any available credit?
- Gold – To invest $1,000 in gold you would likely go to a coin show or jewelry shop and buy less than one ounce in gold coins. If gold doubled in price, you would have slightly less than $2,000 when you sold because of the spread between the buying and selling price. Profit = Est. $1,000 but the question is “what to do with the money now?”
- Stocks – It is difficult to invest this small amount of money but let’s assume you bought an “odd-lot” or less than 100 shares of a specific stock. I will not discuss penny stocks because of their, at best, spotty investment history. So, if the stock doubled and you made a $1,000 profit; again you would be faced with the dilemma of what stock to pick next.
- Real Estate Wholesaling – In this case your $1,000 would be an escrow deposit on one house or as many as 10 houses at $100 each. Our historical track record in wholesaling properties is a net income of slightly over $16,000 per property sold.
If they are not sold before our inspection period is over, we give them back to the seller so there is no risk of losing the $1,000, or even $100. If an investor did only four completed ($16,000 x 4) deals a year using a $100 deposit, he would have a return on his investment of ($64,000/$100) x 100 = a 64,000% return on his money. Again, the maximum risk as a buyer is your escrow or earnest money deposit (EDM).
These results for wholesaling are not typical and may be extremely low in some parts of the country and high in other areas. The key to investing is to diversify and limit your loss risk to much less than the entire amount of the investment. Wholesaling real estate offers the maximum leverage of any investment while having the lowest risk aversion at the same time. If you aren’t doing wholesaling already, look into its possibilities!
Source by Dave Dinkel www.positivestocks.com
Stocks and gold as investments have specific documented track records. Companies that report specific stock and bullion prices are industries unto themselves. Trillions of dollars are invested in stocks and gold. Why would anyone compare real estate wholesaling to investing in stocks or gold?
The main comparisons of these investment vehicles fall into a couple of categories. Let’s start by looking at what have been the results of a long-term investment in each one.
Cost and risks to invest in each investment: Gold – Generally 100% of the amount purchased is required to buy gold, unless leveraged by buying options (100% loss risk) or borrowed money. The risk in gold investing is that it is a commodity and wild price swings can ensue causing more than an initial investment if the purchase was leveraged. Stocks – Generally 100% of the purchase price is required to buy stocks, unless margin is used and then 50% is required. The risk is virtually 100% of the investment as many stocks have literally dissolved in value. If margined, the loss could be more than the original investment.
- Real Estate Wholesaling – If done properly, the amount of money required to contract and sell a $100,000 property could be from $10 to $1,000. The maximum risk is the amount of the deposit in wholesaling. How much money can you make in each investment with a very small investment of $1,000 and not having any available credit?
- Gold – To invest $1,000 in gold you would likely go to a coin show or jewelry shop and buy less than one ounce in gold coins. If gold doubled in price, you would have slightly less than $2,000 when you sold because of the spread between the buying and selling price. Profit = Est. $1,000 but the question is “what to do with the money now?”
- Stocks – It is difficult to invest this small amount of money but let’s assume you bought an “odd-lot” or less than 100 shares of a specific stock. I will not discuss penny stocks because of their, at best, spotty investment history. So, if the stock doubled and you made a $1,000 profit; again you would be faced with the dilemma of what stock to pick next.
- Real Estate Wholesaling – In this case your $1,000 would be an escrow deposit on one house or as many as 10 houses at $100 each. Our historical track record in wholesaling properties is a net income of slightly over $16,000 per property sold.
If they are not sold before our inspection period is over, we give them back to the seller so there is no risk of losing the $1,000, or even $100. If an investor did only four completed ($16,000 x 4) deals a year using a $100 deposit, he would have a return on his investment of ($64,000/$100) x 100 = a 64,000% return on his money. Again, the maximum risk as a buyer is your escrow or earnest money deposit (EDM).
These results for wholesaling are not typical and may be extremely low in some parts of the country and high in other areas. The key to investing is to diversify and limit your loss risk to much less than the entire amount of the investment. Wholesaling real estate offers the maximum leverage of any investment while having the lowest risk aversion at the same time. If you aren’t doing wholesaling already, look into its possibilities!
Source by Dave Dinkel www.positivestocks.com