Dave Ramsey, famous personal finance guru, encourages people to save money, reduce debt, and build wealth. Ramsey is known for his claim that anyone can achieve 12% returns through mutual funds. Some people scoff at Ramsey, claiming this is impossible. Well, these people are wrong! It is possible, and not that difficult to do.

You can achieve 12% returns on an investment.

Using the method I’m going to tell you about, you don’t have to bother with mutual funds, and you can achieve these high net returns passively. Okay, I’ve teased you enough. What is this magical method? Well, it’s not so magical. You can easily achieve 12% returns on an investment in real estate, and there are opportunities to achieve these high net returns for Florida investment properties.

It’s clear that there is potential for these high net returns in Florida investment properties.

Is this the investment plan for you? Let’s find out.

Assume that you find a nice house in foreclosure in a decent neighborhood. The house is available for $55,000. It needs about $5,000 worth of small repairs (a new front door, new paint, and so on) before it can be deemed ready for a tenant. Once the house becomes a rental property, it will bring in approximately $900 per month in rent. This does not meet our 12% goal. Not even close. But read on; we’ll get there.

To get 12% (or more!) from this investment, you’ll have to do…some investing.

In this case, we will assume that you’ll put 20% down, which is $11,000. Factoring in closing costs (approximately $4,000) and the rent-ready repairs ($5,000), we are at $20,000. The loan you receive will be for $44,000 ($55,000 minus the down payment of $11,000). At 5% for 30 years, this works out to $236 per month.

Here’s the math behind a high net return in Florida investment properties:

The 50% rule states that over time and averaged out, 50% of a property’s income is will go toward expenses even before the mortgage is paid. This 50% includes expenses related to maintenance, vacancy, property management, evictions, taxes, insurance, and so on.

If we crunch the numbers, we find that:

$900 x 50% = $450

$450 - $236 (mortgage) = $214/month ($2,568 per year) in passive cash flow.

$2,568 / $20,000 = 12.84% ROI (return on interest). This is pure cash flow! This doesn’t factor in the monthly loan repayment, changes in property values over time, or any additional tax benefits that might come from owning this property. When considering these variables, the ROI could easily go over 15%.

Would you like to see a 15% net return for Florida investment properties?

Only you can decide if this is the best investment strategy for you, but it certainly has a number of advantages. Through this method, you could net returns for Florida investment properties that meet or exceed 12%. That is a lot of passive cashflow with (relatively) little labor on your end.

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