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Old 10-23-2019, 06:03 PM   #61
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Originally Posted by Farrell View Post

I'm a new member to the site. I happened across Early the other day when a friend who frequently invests in my real estate company asked my opinion on a company that was guaranteeing 18% returns, an obvious red flag. As I searched the entity making the claims I came across a thread from this site where most all the contributors to the subject were right on point- as a return that high is unlikely sustainable and certainly can't be guaranteed. I am proud of the fact that I have over the last 25 years produced well above average returns that are collateralized by real estate in the economically sound central Iowa market. It was encouraging to come across a site where the members recognize the difference between realistic and unrealistic claims. Which leads me to the question-what besides pie in the sky returns coupled with implying a guarantee throws your radar up? I always scrutinize the core collateral and durability of an asset. Glad to be a member- thanks!
I'm pretty sure I've heard lots of radio commercials for the firm you're describing. They start with "If you're not earning 18 - 21%, you're losing!" I once did some research on that company. Apparently they renovate buildings on the east coast, and sell off units, and require their investors to put a small down payment (like $10k) and get a loan in the investor's name to buy the rest of the condo. And I believe the 18% "return" is the leveraged return on the $10k down payment. So if I put down $10k, take out a loan (for which I'm fully liable) for $300k, and earn $1,800 profit in a year, then I've earned my 18% return. Definitely not a risk I'd take.
Saved 8 figures by my mid-40's as a professional bubble-spotter. Beware...the Fed creates bubble after bubble after bubble.
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Recognizing the red flags
Old 10-25-2019, 08:37 AM   #62
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Recognizing the red flags

Iíve heard those ads on Bloomberg Radio and wondered how they work. Credible but clearly exaggerated and may or may not reflect the level of risk involved.
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
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