The great part about junk bonds is you can make an incredible return on your investment. The rest of the story is there is a high risk of default. Is it possible to earn junk bond level returns without the accompanying risk?
We thought you’d never ask. Of course there is! It’s called income property and if you are serious about achieving financial independence, we’ve never seen anything like it. Here’s another example from the eternally robust (for investors) Indianapolis real estate market.
We’re talking about an 1,800 square foot property built in 2000. Yes, it needs some rehab but you could buy the place and pay for the rehab for the purchase price of $36,800. Of course, you’re not going to put up that much of your own money up front – that’s what banks are for.
Assuming a normal rental rate, even if the property never appreciated a single bit, you’d be making a 12% profit per month for a total of $4,564 dollars in the first year. That means you’ll earn about $375 per month MORE than the mortgage payment.
Take into account even a normal rate of appreciation and the total return on investment (ROI) should be about 23% yearly. That’s why we like Indy and that’s how you get a junk bond rate without the risk. When you do the proper research, as taught for free at JasonHartman.com, the odds of buying a poor risk property are practically eliminated. Our rule of thumb is a property must make financial sense the day you buy it or you shouldn’t be buying it.
The Creating Wealth Team
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