Infinite Returns in Real Estate 

One benefit of investing in real estate that stands out most for people is the idea of the “infinite return.” The concept itself is relatively straightforward. It happens when you retrieve your initial investment but still own the underlying asset and income stream.

I bought my first investment property in Houston, TX. At the time, I did enough research to know Houston was booming, and the property was cash-flow positive.

Real Estate Investing Isn’t Usually Nail-Biting 

Collecting rent checks and letting the real estate market do the work of appreciation is about as exciting as watching paint dry. But the reliability of real estate to produce is what makes real estate such an excellent investment in the first place.  But, the idea of infinite returns sure is attractive. 

My Infinite Return — An Example 

Using general numbers, my infinite return happened as follows;

• Purchase price $77,000, netting $440 per month (after PITI). The initial down payment plus closing costs were approximately $19,000.
• Three years later, the house was valued at $118,000, and I refinanced it; $82,600 new loan – $61,600 old loan = $21,000

The net result was that I retrieved the initial $19,000, and the property still cash flowed at about $150 per month. Most importantly, I retain the $118,000 asset and can potentially repeat the process several times over.

Can you do anything close by investing in stocks? I don’t think so. 

One Important Lesson to learn early in passive real estate 

I wish I had followed the advice of finding a Property Manager BEFORE finding the house. After going through three different project managers in Houston, that lesson finally sunk in.

Will this strategy work for you? It depends. The chances of doing this in your own backyard are entirely reliant on where your backyard is located.

If you live in an area with an over-priced market, investing in out-of-state real estate could be the way to go!