How to Understand Infinite Return through an Example Deal

The term "infinite return" is widely used in the real estate investing space. In this video, I walk through exactly how it works using real-world examples.
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Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and most recently his book on entrepreneurship: The Sleeping Giant. Ken is a Rich Dad Advisor.
Learn more about Ken at: www.KenMcElroy.com
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For more information on this topic check out the links below.
How To Earn Infinite Returns in Real Estate - BiggerPockets
www.biggerpockets.com › Home › Real Estate Investing Basics
Sep 11, 2012 - Infinite returns are achieved when you no longer have any of your money invested in a property, but you still own it and the property is still generating income. You can earn infinite returns in real estate through two strategies. ... Most real estate investors have heard of “no money down” real estate investment strategy.
Infinite Returns. The Rich Dad blogs by Kim and Robert Kiyosaki.
www.richdad.com/resources/ric....
May 17, 2018 - She's now the self-proclaimed “Queen of New York Real Estate,” has a net worth of $80 million and lives in a penthouse on Fifth Avenue.
How To Get An Infinite Return On Property?
onproperty.com.au/infinite-re...
But how do you get an infinite return on property as is it actually as good as it ... Can you comment on this strategy of real estate investing and whether you think ...
Creating Infinite Returns - The Good Life In Ten
goodlifeinten.com/creating-in...
Mar 16, 2017 - Tags : exponential growth, infinite returns, investing, investment, passive income, real estate investing, rental properties, value add, work smart.

[@oasysgroupofcompanies2056]

This video worth $5k worth of paid seminars...bless KZbin! Thanks for sharing a insider info from the inside Ken!

[@himanshukamble6025]

Hey Omar ru n Indian man!? Me too we really need to do this in our India! What do u say bro?? With our Financial Education!👍 Waiting for your reply.....

[@shyyam100]

Hey! I am from India. We need to do this in indian context. Why don't we talk and discuss what can be done?

[@harshal6342]

totally agree

[@devgupta2897]

@@himanshukamble6025 yes we can do it if we take action properly and share info...

[@61044711]

@@devgupta2897 can we do it really in indian market. For this we need to start company or individual can also do this.

[@MrShaquira24]

I found Ken and Robert’s videos by mistake...... best mistake of my life. Valuable information.

[@IterumLife991]

Excellent video Ken. I've been investing in 1-4 units for about two years now - I have 10 units and a plan to get to 40 units in the next 3 years with no external funding. You're teaching me how to take it to the next level and build significant wealth with other investors. I want to do this after my 3-year plan is done. Thank for peeling back the onion.

[@juliosantos1628]

Hi Congrats for your business! Please help me figure out those scenarios: A) What happens and how do you manage if , from a moment to another, due a real state bubble or other, your property lose value and stands very below loan amount? B) what happens if from any weird situation you cant rent your property, but now you have a massive loan to pay? Thanks

[@paulpena9548]

Thank you. One of the best videos on YT describing why RE is the King of all investments!

[@KenMcElroy]

Thanks for watching Paul. I'm glad you found good value in the video!

[@InvestorMelDaveDupuis]

Love putting none of my own money in all of our deals. It’s been life changing.

[@joepschmobly]

Fantastic videos! Thank you for producing them. Will you please explain the details regarding the agreement with the investors? What percentage of ownership do they have upon initial investment? What percentage of the profits do they receive? How does this change after youths first cash refinance? Etc. Much appreciated.

[@user-vu8vl9uq2m]

Thank you Ken for sharing some inside!! Appreciate your support!

[@2027759]

Great video Ken, simple, clear and inclusive. Thanks for educating us.

[@wesleyteenwesley]

Thanks man, it hard to find people sharing so openly and clearly explaining the concepts straight forward.

[@rksr8103]

Ken all your videos are really really amazing. The insight details that you provide are real real great. Keep up the great work. Keep posting such informative example videos. Cheers.

[@MikeInteligenciaFinanciera]

This was a masterclass 👏. Thanks for sharing this Ken. Great job!

[@jpgechele]

The way explained it makes it so easy to understand! It’s like having a friend sharing his knowledge.

[@joelrocks888]

Thank you Ken. You are a blessing to others. Never tire.

[@Potatoroomr]

I came back to rewatch this Ken you’re going to make my family rich with this type of knowledge

[@junkercars]

thank you for taking time out of your day to enlighten us about how real investing works... im gonna halfta watch this a few more times ...infinite thanx

[@KenMcElroy]

Thanks for watching 1844junkercars! I'm glad you are finding it valuable.

[@pete86]

Yeah this one hurts my brain. lol

[@MartinMartinez-uq4gx]

Can’t believe this information is free. Thank you so much Ken!!!

[@nhalie0517]

Been looking for this kind of video and finally found your content, thank you so much Ken for a very clear explanation.

[@DuduTNiyukuri]

Wooow, Eye-opening! 'Ve always wondered ... I was blind now I see! Thank you, Boss!

[@somebody602]

This is the best recap I've ever seen on KZbin. You're the goat

[@KenMcElroy]

Thanks Remi. I'm glad you are getting some value from the videos.

[@charlesritter6640]

@@KenMcElroy it's true Ken, when it comes to syndicating apartment complexes many of us consider you the GOAT! Keep up the great work 👍 we really appreciate it.

[@derekstalhut2193]

Thank You Ken! You are truly a LEGEND !

[@parabellumboxing-akmalgert1821]

This is really soooo good! Thanks Ken, You are such a great mentor. 👍🏻

[@Mr.RyanXXX]

Now this video you wanna watch 50 times whoaa blowing my mind! Thanks Ken 🙌

[@garystalick2617]

Ken...You're fantastic. You made seem so simple and fun. Thanks for the video.

[@TheGabeazrepresent]

Masterclass. Please keep producing and sharing these videos Ken. Subscribed.

[@SSB-gq5tu]

Hearing this in 22' and still motivated by it your the man Ken !!

[@nimakh1]

Ken, God bless you! I have taken your course and this video and many other videos from you .. I just want to say , I hope to God you never feel alone, unhappy or sick ... thank you

[@eddieatum617]

I liked the understanding of depreciation .. gold nuggets of info..big thank you...

[@deto2conduny]

Wow, this is so amazing! I have a long way to go, don’t even have my first rental property, but I’m amazed buy all this information, I find it so interesting and fun, I’m so encouraged to keep learning and start getting out of the rate race. Thank you for all the valuable information you share!!

[@thunderkey1]

Very good Case Study! really helpful in presenting the gist! thank you.

[@chinoc7046]

Thank you Ken, you're awesome! I love ABCs of real estate investing😁😁😁😁

[@tommieruiz2676]

By far, for me, the best most educational informative video for real estate investing. Although, there are some questions but overall extremely helpful. Thx 🙏🏼

[@savann.sun1980]

I just learn something big. That’s what I was looking for too. Thank you so much for sharing.

[@empoweracademy1322]

Superb example. Explained the magic so lucidly. Great Job!

[@mildredmccloud454]

El you know

[@mkelly1118]

Great video! 👏🏻Love the timeframe (‘05 -> ‘09) and cap rates (3.68 -> 4 cap) in the example here 💪🏻 A true value-add. Thank you!

[@regenerativeliberty7915]

I cannot believe I just sold a triplex; I should have refinanced. I was brought up rehabbing undervalued multifamily and mixed-use properties. We would hold then sell and find the next project. Not sure how my parents and now I have missed the last critical step of refinancing. Then I watched this video and the light bulb went off. Thank you so much for this video and laying out the plan in detail. Currently we are putting in an offer on a six plex that breaks down to 5700 gross, 2400 NOI, 80K down for 320K price. It is 1/2-acre lot and 7000 sqft, so large units. Anyhow thanks again for all the videos, but this one in particular is a game changer.

[@acctsupsvc6454]

Thanks Ken...here from Jamaica and I just started watching your videos since yesterday... everything is new to me but I want to learn...

[@asonyutonny7635]

Have just sat in the lecture theatre of a real estate professor and he nailed infinite return for me 👌👌

[@CD-ii8it]

Absolutely genus, thank you so much for these videos. Life changing!

[@UltimateBargains]

This video is an excellent summary of the basic syndication principles that I teach to accredited investors. I got my start on learning syndication and refinancing from two authors: Tyler G. Hicks and Robert Kiyosaki. "Mortgaging Out" through refinancing is an essential part of creating inter-generational wealth with real estate.

[@JA-vv8wy]

UltimateBargains do you mind if I ask which books by Hicks you learned about syndication from? I see he has several books & just wondering where to start. Thanks

[@keepgoing7630]

What is the name of book of Tyler G. Hicks?

[@TheThegreenpi]

So how does he get paid if the investors initially have all the equity and he's giving them all the cash flow? Does he charge a management fee or does he wait until the refi gives him $1M to give back to himself?

[@jadezhs]

This opens my mind. I watched it many times and understand it eventually how the magic happened. Very useful content! This makes me decide to refinance my rental and do it the right way. I did my other refinances completely the wrong way. Thanks for the content!

[@warringalice3980]

LoVE it.....We did something similar with a single res about a year ago, much smaller scale. We went crazy and bought a 12 unit appt building about 18 months ago. we hope we can be good students and repeat your process. albeit at a much smaller scale.

[@myindia4]

Loved this. Thank you for making this.

[@humblebee7979]

Beautifully explained. Thank you.

[@RealEstateRadioTV-SA]

Best Video By far on youtube world Thank you , Ken Mcelroy. Regards South Africa

[@MONITRIQUI]

I feel like the luckiest person in the world after seeing the Spanish (not my first language because the first one is Trique) subtitles which gives me a better understanding of the topic you’re talking about. Thank you! I love you!

[@Jesse_Lane]

Absolutely fantastic, Ken!!

[@Onecamera]

Excellent example. I hope I come across a deal like this at least once in my lifetime.

[@tocale]

Amazing explanation. Top 3 of the best videos i have ever watched. António from Portugal

[@harrylove]

Ken - great info, and you’re easy to listen to also. Thanks for putting this out for everyone to see. I do this same thing, but on a micro level compared to you. My only regret is not doing it sooner! Thanks

[@WeiPhung]

Great stuff Ken! Super practical while educational. Will implement your tactics for a smaller project.

[@KenMcElroy]

Thanks for watching Wei! Glad you found the video helpful.

[@michaelcorbett4236]

Ken, thanks for this. The principle applies to other businesses as well.

[@eugenberzani1216]

Wow! Thank you so much Ken!

[@KenMcElroy]

You're welcome Eugen! Thanks for watching.

[@remigiusttumaini1590]

Thanks so much Ken this is very practical I have learned a lot.

[@KenMcElroy]

Thanks Remigius! Glad you got value out of the video.

[@Just_trying_stuff]

@@KenMcElroy Hi Ken great video. One thing to understand? In your video NOI is whithout the loan payment. Should the NOI be profit after expenses including the loan payment?? Greetings from Serbia from growing Entrepreneur

[@shallynovisyar899]

Thanks Ken. Great content. Another great finding in this video is also, I found you renegociate the Bank interest of the debt every time you refinancing the asset/debt, if i'm not mistaken.

[@mr.searightii5155]

Best video ever!!! So informative. Thank you.

[@Erandiski-cc4dt]

Currently doing this with our plaza refinanced. With the money of plaza we will buy a Bigger Shopping center. With zero of our money it's other people money. Thanks Roberto kiyosaki and Ken, with Ken advise will do it even more.✊✊ people out there if you want to Invest in Real Estate listen to Robert, Kim and Ken this are the real teachers we need.

[@dianemai7439]

Excellent real example. It’s a great way to generate cash flow. Thank you.

[@KenMcElroy]

Glad it was helpful Diane!

[@sunnygupta970]

This information is gold .. thanks Ken

[@KenMcElroy]

Thanks for watching Sunny. I'm glad you are finding value in the videos.

[@mams471]

Thank you Ken McElroy for this video it's very helpful and interesting

[@drtonytom5]

Thank you sir, your lessons are helping me become a better investor

[@VinnieRodriguez1188]

Super insightful. Thank you

[@johnnyb33good21]

Just beautiful! Seeing these numbers motivates me. I would love if you would make more videos on syndication that go deeper

[@keirdoubas]

Brilliant video. My investment methodology is exactly the same for 1 apartment as your 267. thanks for the video Ken.

[@stevenhartman254]

Thank you thank you thank you. I appreciate you sharing your wisdom.

[@KenMcElroy]

Thanks so much for watching, I'm so glad you have found value in the videos.

[@giorgosgovatsos8582]

Hi from Greece perfect example nice lesson to my mind hope to be successful in some years .! Thanks to you and Robert ..!

[@bigc3748]

Thanks for your knowledge I like learning from your point of view

[@raphnwokobia3301]

Brilliant lecture! Anyone who follows this intelligent investing method even a smaller scale will surely attain financial freedom from real estate.

[@lenamosakajp]

Super great video, it open my eye to learn how the professional investor do, thank you very much Ken!

[@zendinorr_04]

When you were talking about depreciation recaption, which I havtb heard before, I had a good idea what it meant and talked about quick capital gain vs long term passive income, I wrote this fat paragraph about why what it is and this guy literally confirms it don't sell for capital, hold on on, no tax, passive money for longer time, bank happy and you, I'm 17, didn't go to special class or anything I'm glad supervised I understood it, said things before he said them himself, I'm just poor 😂😭

[@TorontoBJJTeam]

This is gold thanks Ken!

[@toramatsuoka5408]

Ken, I love your stuff, been watching for a while; I’m actually in the middle of my first $10m deal, leveraging many of the things I’ve learned from your videos. My question here today is about cap rates. Your comment about that here was a bit confusing, could you do a video on cap rates?? Thank you for all your guidance!

[@ecstasybeats8687]

Well, the real estate business in my country's capital yield 30-40 percent profit yearly, but lucky you! If i had even 10 percent of a million, i would be a millionare in 5-6 years.

[@hollywoodbest9499]

@@ecstasybeats8687 really? Where are you from Sir?

[@bigmoneymandan360]

I was looking all over and getting these guys who were unprofessional trying act like your friend on youtube and just seemed like they actually make money show there cars off and you realize they have cars not because they know how to sell but instead because they scam people. All talked about it but they were just talking points. You broke it down mathematically which is what I want not vague do's and donts. props bud you got a new subscriber. I am maybe getting into it soon but unsure where to start and you just broke it down like kindergarten math. later Ken and I'll lyk if I need any advice ;-P

[@excelpinoy1086]

Though technical but very logical presentation. It takes years to get that wisdom.

[@shanerockriver5030]

I just shared this video with my teenagers. They had many questions throughout which made it hard for them to stay focused and for me to stay coherent and they had a lot of trouble understanding how this was ever possible and at many moments seemed very dazed and confused with much head shaking. But once they began to understand the main ideas and grasped the concepts, they began giggling, jumping around, and laughing like they had just found a box of hidden candy that no one else knew about. Its gotten very chaotic over here !!!!!!!! Thank you for sharing this video !!!!

[@chuckiehsieh]

Shane Rockriver if you all understand please answer some of the questions in the comments, thanks.

[@devanandauchoi5859]

Thank you Ken for the elaborate explanation of infinite return. This is one of the best ever video on KZbin. Now, My question is how do we manage payment to bank when we take loan for construction of building rather than buying existing building. In this scenario cash flow would be zero during initial construction days. Kindly enlighten me.

[@TheTrancemix001]

This is great stuff. I always love seeing deals like this. But 2 challenges I see for a newer player. 1) without a track record, how do you get a loan from a bank for a multifamily? 2) without a track record, how do you raise equity investors? Success begets success but for people who are trying to become successful, i just don’t know how to get started without that track record of success. Of course, a newer person would go for something 1/10 this deal, but the questions still remain.

[@FabianBaez]

Phenomenal lesson Ken

[@KenMcElroy]

Thanks for watching Fabian!

[@adipratapsinghaps]

2 questions: 1. In 2005, when you gave 300k to investors annually, where did you get the money to repair the apartments and add washers and dryers? Is it the 300k that you used instead of giving it to the investors? 2. All cash flow is going in the pockets of investors. What is going in your personal pocket?

[@hans-denisjr8417]

I’ve also been wondering. Maybe the equity, $5M in 2009 and then $10M in 2014. But how does he actually enjoys it?

[@jhblake123]

The cost to repair the apartments is probably around 100k or so. it's pocket change when you invest 4 Million so I am guessing he just rounded to make the math easier. For the second point, this guy was one of the investors. So part of that 4M came from his pocket, meaning he was getting part of the cash flow. This is why Trump only pays $750 in taxes while a minimum wage employee making 30k annually pays 10k in taxes.

[@jessegonzalez9091]

1). Depends on the cost of the repairs or improvements. If it’s true repair and maintenance, it is captured in the “expenses” in the NOI calculation. If there are additional investments into the property like washers/dryers, they are likely capitalized and put on the balance sheet as a depreciable asset. The depreciation would be captured in his NOI calculation as well. 2) He is likely invested alongside his external investors, so when he returns money to the investors, he gets his share as well. Often times the syndicator gets equity in the deal without actually contributing money/cash. They “earn” their equity from arranging the transaction. So for Ken or any other “arranger” they get infinite returns on day 1 (outside of sweat equity).

[@SarahSarah-sm4ux]

You are a genius! Thank you!

[@ctaylor1655]

Great video Ken! Enjoy the detailed content and longer description of a topic in this video. Hopefully, you will have investment opportunities in the near future. Thanks again

[@OwlBeLove]

Thank you Ken so much

[@victorstudartrj]

Perfect 👌🏻 very nice lesson, one question though... what’s the percentage for the investors and yours?? Ths

[@johnahern5306]

Great video Ken!

[@AngelGonzalez-fy9ej]

Excellent video. Thanks a Lot.

[@KenMcElroy]

Thanks for checking it out Angel!

[@kirkmerrill992]

Great video wealth of information Ken! 👍

[@KenMcElroy]

Hi Kirk! I'm glad you liked the video. It takes a little while to get through it, but I think it will be very helpful to people.

[@kirkmerrill992]

I study everything you put out Ken. Those who put in the time will get the lesson your trying to teach.

[@lang-ed3bk]

i'm confused. the noi was 700k annually, but the loan payments was $400k/mth. how are they able to make the monthly payments?

[@RedPillGrimReaper]

Thank you for the video. Very informative. I’m just starting to get into real estate so please correct me if I’m wrong, but when you’re looking at NOI, as your income minus expenses, aren’t your expenses tax deductible?

[@kaloianmarinov7581]

You are a real teacher, none of this entrepreneur lifestyle bullshits.

[@KenMcElroy]

Thanks for watching Kaloian! I'm glad you are finding value in the videos.

[@kaloianmarinov7581]

​@@KenMcElroy So actually a cashflow of 2% of the value of the property per year is a good investment?

[@davidmorgan9245]

Great video!! Thanks!!

[@MrCrazykill2]

Great content! Just one question, why do you still pay your investors when you already returned their initial investment of 4M?

[@milciades56]

Amazing!!!! Best video ever!!

[@FabianBaez]

Fantastic lesson Ken thank you

[@KenMcElroy]

Thanks for watching Fabian, I'm glad you found value in the video.

[@tennisunderground]

Incredible video, excellent value

[@paulosergiomoreirainocente7524]

Our each time I realize that the biggest barrier for the vast majority of people is without a doubt. The social along with educating real things, which are important. How do you teach ken mcelroy. Thank you very much. BRAZIL

[@Joe-wx3dp]

Hey Ken, thanks for the video so much value. I got a question you said weak markets has high cap rates and strong markets has low cap rates, but you pointed to 2009 as having high cap rates when value of the property was much higher? Isn’t it suppose to be the opposite?

[@shadeshade6217]

This was very valuable, I wish I knew this earlier. So on these properties that has units the bank makes the value of your p/a (cashflow) return and not so much on the building itself if I am correct. Do you make the loan with the tenants contracts or estimate?

[@justinigoe2969]

Great stuff Ken!

[@KenMcElroy]

Thanks Justin! It is a bit complicated but when you walk through the example it helps clarify it.

[@AP-tx4zw]

This is awesome! What I’m trying to figure out is how the company makes money. The investor return is understood but where does the company profit flow from. Is it from operational cost and/or from a percentage of money from the cash out refinance?

[@dennismarcon7560]

Great video Ken, Thanks. I do have a question- Why are you still paying the investors a return after the 1st refinance?

[@christopherball9865]

Ken this is a fantastic summary. My son (graduating Virginia tech real estate next year) and I get a ton out of your content. Do you have a summary of how investors vs sponsors participate/share in the cash flow and cash out refi? I know there must be a range. But what is good/ common?