How many on this board TRUELY know your profit? 10%, 20% more?

Let's say your profit is 15% after everything is paid (I think that is what profit is)

And let's say you take a PERCENTAGE of THAT profit and wrote you a check every Thursday, deposited that check into an account that you cannot get to that easily.

Can you tell me how much would be in that account after a year?

Yeah, I get it, kinda corny. But maybe it gamifies your lonely business. Maybe it gets the owner watching those little number grow and inspired.

Then that little account grows into this amount that says "HEY!" I want to grow faster, so it buys a vacation property that the family enjoys. A property that can be passed on to future generations.

But the family cannot vacation ALL of the time, to that property joins VRBO and AirBnB and start creating its own cashflow. Family tree changing cashflow!

All from a small, weekly task that becomes automatic and routine. Happy Saturday. WHO DEY!

You mean profit and not rate of return, correct?

You just mean the end result of rents minus expenses?

I have a database I’ve been using for five years now. All my homes are paid off so there is no mortgage interest expense.

Every year my profit is roughly 2/3 of what I take in.

Lee,

Are you referring to profit before or after Taxes? And what about profits that exist on paper only. Eg. S&P index funds that show a yearly gain of 12% which could easily disappear with a 20% drop in the market.

The profits I make are REAL. After all expenses and taxes, I can go to the bank and withdraw the actual cash, put it in my pocket and walk around with it.

Just a quick observation. You have several posts about money and income. As a poor investor starting out in mid 80's I can honestly say we/I didn't go down that rabbit hole.

So as a new investor why are you concentrating on the "cash count" so early in your investing career?

Since 1986 rents have almost always gone up to more-- more than cover debt as the years went on.

Thank you all so far. I post these to generate good conversation and different views.

Probably last post for today as Bam Bam and I are going to freeze our tails off at the Raiders/Bengals game this afternoon.

Lisa, yeah for this thread I just mean profit. Nice job by the way!!! We do figure ROI and sell off dogs to improve our position. Will you stay debt free/cash buy for the rest of your journey? Great position to be in.

Roy! You and I think alike and YES, profits are REAL when they real cash in your pocket after everything paid. We do our weekly NetWorth evaluation but we can't pay for kiddos Med School with NetWorth! I wish we could have gotten together more at the last convention. We will next time.

myob- great point. Rabbit Hole is one of my favorite places (My brother-in-law owns a camp called that! kinda funny) Have you ever bought a property thinking you over paid AND did you really actually ever overpay? The reason behind this question is EVERYONE thought we over paid for one of our flips. One of the best we did.

My mentor used to have me accompany him to pick up the

rent in the 60’s. The rent would be $75, $80, $90 and the $105 for the biggest property. I asked how much is your mortgage including taxes and insurance. On most properties he cleared $5 to $10 not counting depreciation. I was hooked. The renter’s were buying all these houses for him.

Lee, i am so glad to see you posting again. I still remembered Pebbles leading a round table at convention, with Brad's help. Hope you and BamBam are enjoying the game.

My husband threatened again last night to pay off my credit cards if they aren't paid off by the time he retires soon. Threats like that get me motivated to watch the expenses, up the income, as i want to pay those from my business. Paying down about 2k a month, though I have a few big expenses in the next few years ( two roofs, one furnace, one water heater, one sidewalk/ patio/ shed) Hubby knows that his skittishness about debt helps motivate me, so they were friendly threats.

Lee,

Yes, I wish we could have spent more time together at the last convention. And like you, most of my postings here are to make good conversation and to get feedback from other LL's.

35 years ago I set up an auto draft to pull $ per month and invest it in a series of mutual funds on the day my paycheck hit so I wouldn't miss it. I think I started with $100 and then upped it every time I got a pay increase, at the end I was putting in something like $450 per month. Like you said, something that is not easy to take money from in a pinch. I kept this in place just over 20 years. If I don't touch that money for another 10-12 years I expect it will be worth over $1M. If I hadn't saved it, I'm sure we would have blown it on things like eating out. This will be a backup to the backup plan if things go South in retirement, I don't expect it will be used. Which do you think my kids will appreciate more, all the times we ate out while they were growing up, or a nice pile of cash to retire early on.

Lee point is: we don't care as investors what anyone thinks about what we do. THEY ARE NOT US. They have opinions and they are not based on anything -- of substance-- only opinions.

They don't know diddle or squat!

AND no of my 80+ SFH's originally purchased I never over paid. and I never had to ask for less rent then right out of the gate.

Thank you EVERYONE! This is what I love about this board.

Right on Jim! If newbies just saw you example and stick with it, RE or LL works!

Hello Busy, Pebbles is really a chip off the ol' block. She is going to wreck havoc on what ever she decides to do!

And yes Roy, once this RE investing really gets a a rollin', it seems like we pay more and more in taxes. Between or rentals and flips, it is a machine that just get bigger and bigger.

I get boarded really easy in this game. So I have to create little games or goals just to stay motivated. This profit gimmick is just a way for me to keep entertained during this little streatch of our career.

my sister had this saying: watch the penny's and the dollars will follow. That doesn't require counting every penny every Thursday.

I once asked our VP of maintenence about this as the company was peeing away money left and right. Mechanic's coming in on an off day at time and a-half and have nothing to work on.

He took my question and said frankly I don't know what this means.... 4 years later the company declared BK.

myob- awesome... reminds me of my grandfather's saying... take care of the pennies and the dollars will take care of themselves

PROFIT REALLY DEPENDS ON WHAT THE OBJECTIVE IS. If you are just doing the LL, you have ask yourself if you want net or gross profit ratios. If you are flipping a place, then the cash flow really doesn't matter. Lord help you if you mix flipping, wholsaling and landlording.

So ROI and cash on cash on the metrics that matter to me.

But ratios by themselves don't tell the entire story. This year I elected to add to my debt after many years of making double and triple payments. Inflation does that though sometimes.