Earlier this week I had a meeting with one of the local startups that I am mentoring.  Over the last year his company’s bank account has been reaping the rewards of their hard work and so he has been considering his best option to invest the returns from his compounding successes.

Knowing that I am an active real estate investor he wanted to learn about how real estate makes money.  He had performed a number of cashflow analyses, but, was failing to find lucrative returns.  I could sense his frustration mounting in each additional word that he was saying.  “The best cashflow I’ve been able to find is approximately 8% on a real estate investment and that’s just… well average”.  He frowned.  I smiled and excitedly said “That’s fantastic, you should put in an offer, do your due diligence and buy this property if everything checks out.”

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