Over the course of time there are many ups and down in several markets.  As news medias and other financial reporting outlets suggest hording cash reserves to weather a storm, one must take into consideration all alternatives available to a persons self goals and objectives while maintaining a control of their risk paramaters.

With that said, the question remains................

Does your bank, credit union, or S&L offer money market deposits, CDs, or savings accounts at 8% or better?  If you said yes, please stop reading and go back to dreamland.  The simple fact is there is no financial instrument that banks offer which yeild as high of a return as you can currently achieve in the real estate markets...........without excessive risk.  Let me explain;

Most risk from real estate comes from the inability to maintain the current debt attatched to a property.  However, when there is NO DEBT on the property and it is rented you have essentially eliminated the largest risk to your portfolio.  Other risks include flood, weather damage, vandalism, fire, sinkholes, etc. which are all insurable and thus eliminate these risks.  The risk of a bad tenant is also predetermined as the state of Florida allows for very favorable eviction laws which can be explained by the state or your professional attorney representaion.  The fact is that owning real estate in the state of Florida with NO DEBT, insurance coverage, correct placement in a holding title, and professional management services yeilds incredible returns that dwarf returns currently offered by the banks.  Another word of note is you have unlimted protection of assests with correct placements as mentioned above versus a maximum $100,000 safety net by FDIC that you get in a bank...........remember those poor Millionares of IndyBank just a couple of weeks ago....ouch! 

 To elaborate what I am trying to illustate, take a look at the following example;

Option # 1 -  Place $1,000,000 in your local commerical bank

Upside - possible 3 to "maybe" 5 1/2% if funds are tied up long enough

Risk - $900,000 at risk of full loss if bank goes under as FDIC insures to 100K per account ( and as we just found out a few weeks ago with Indybank, those who try to beat the system with multiple accounts in the same bank under different allias doesn't protect you anymore....)

Option # 2 - Place $1,000,000 in real estate for cash flow purchasing the properties with zero financing

Upside - rental and CASHFLOW! Using depreciation the CASHFLOW is tax-defered until recaptured at a sale, thus your current yeild skyrockets!  Oh by the way, despite the experts on the financial news networks proclaiming doom and gloom & end of the world appocolyptic times, real estate sometimes does go UP in value.......( just a little sarcasim...)

Downside - As mentioned above, almost all downside risk can be insured, measured, and managed PRIOR to your capital placement of funds.  The biggest risk of this is risk of illiquidity which can be tailored to each specific circumstance through refinancing or private note placement.  The fact that an all cash, no debt purchase is catered to only high net worth individuals which have excess funds sitting in accounts make the illiquidity risk non-applicable.  Thus risk is minimal while upside is astronamical.

Final note.  Anyone considering investing in anything should always consult the advice of a professional TEAM.  Take time to cusomize your financial health with a long-term gameplan assisted by like-minded individuals and you will live a more enjoyable and prosperous life.

Have a great day!!