Reply to How is it "easy to make money"?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I made a lot of money starting pretty early on. The key was that I was willing to take a risk and start a business. Most people are afraid to take a calculated risk. … And because I can put down $2M, lending me $6M is easy. My expected return on the $2M. It will be about $320k per year cash flow plus principal pay down. 16% cash on cash and over 20% overall rate of return. [/quote]

You might be right, and you might not. The above says that it’s easy to borrow $6M when you put $2M down, and that you expect to clear $1.6M annually after operating expenses and need $1.3M to cover the loan payment. So if you have higher operating expenses or a major capital expense or one of your tenants goes under and you have an empty location for a year, well, the loss is yours to bear. Having only a $300K annual cushion on an $8M facility isn’t that much. Yes, it’s a “calculated risk” but what this means is there’s a chance you lose big money. Yes you’re rich now. Survivor bias means maybe you’re brilliant, or maybe you just have been lucky. [/quote]

You are an idiot. [/quote]

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