The speaker argues that real estate is a poor investment for making money. They present two scenarios: buying a single-family home for $400,000 and renting it out, which yields an average profit of only $167 per month, representing a significant risk for minimal return. The speaker then contrasts this with investing $400,000 in a small business, which can generate an annual profit of 10-15%. This implies that small businesses offer a potentially much higher return on investment compared to residential real estate.

Codie Sanchez

Real estate is an awful way for you to actually make money.

Option one, you can go buy a single family home for $400,000, the average price in the US, and then you rent it out to somebody. Well, the average rent nets you profit-wise about $167 a month. So, you're taking a $400,000 risk for like a couple hundred bucks a month.

Then you take the average small business. You could buy same way you could for buying a small piece of real estate. So, $400,000 business, you put some money down and get the rest from the SBA or seller financing. And the average small business make 10 to 15% per year.

Real Estate vs Small Businesses

Real estate is an awful way for you to
actually make money. Option one, you can
go buy a single family home for
$400,000, the average price in the US,
and then you rent it out to somebody.
Well, the average rent nets you
profit-wise about $167 a month. So,
you're taking a $400,000 risk for like a
couple hundred bucks a month. Then you
take the average small business. You
could buy same way you could for buying
a small piece of real estate. So,
$400,000 business, you put some money
down and get the rest from the SBA or
seller financing. And the average small
business make 10 to 15% per year.

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Real Estate vs Small Businesses

Transcription