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Investing in a FedEx route basics
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<blockquote data-quote="dmac1" data-source="post: 2508726" data-attributes="member: 60252"><p>Find somewhere you can invest in rental properties. Use your cash to buy with enough down payment on each property to just generate a little positive cash flow. You will have tenants buying real estate for you over time. It's a lot safer than 'investing' in a fedex 'business' that has no real history over time of both generating income AND appreciating. You can hire a property manager- just get a good one that will keep your property well maintained. Then you can sit back, collect rent, get a real job, and between the appreciation over 15-30 years, have the benefit leveraging your cash. Even during the 2006-2009 crash, rents never really decreased.</p><p></p><p>If you are handy and want to be involved, you can do almost all normal maintenance yourself. You won't be tied to your job as much because of the rental income.</p><p></p><p>If you were considering driving one route or driving even part-time as an owner of fedex routes, rumors have been around that fedex will not allow owners to be drivers much longer. That will greatly decrease any potential income. Unless you pay minimum wage, which is going up almost everywhere, it is hard to make 10% of gross pay as net profit after paying wages, vehicle expenses, taxes, etc, plus any loan payments if you finance. I paid my drivers decently, got my routes for free, and only made maybe $10- $20 per day per driver, plus had all the headaches to deal with when you have employees.</p><p></p><p>With $200k, you can control 5 decent rental properties or an apartment building in many areas of the country, and generate cash flow, pay down the debt, plus get the appreciation working for you. If you buy a $150k home with $40k down, with rent around $1000 a month where I live, you would net a couple hundred per month after expenses. In 7 years, you'll owe $100k, and the value would be around $175k based on history. On your $40k investment, you can get back $75k plus the cash flow. Or you refi, lower your payment, and increase your cash flow. For a $200k investment, that means your net value of the properties would be $375k. </p><p></p><p>If you invest $200k in routes, in 7 years, it will still be worth about the same plus only inflation because fedex isn't going to make it more profitable for you. The vehicles decrease in value, the tax write-offs for those vehicles drops, and you need to plan for replacement. A lot of people don't count depreciation as a real loss, but that depreciation does come off the market value of the 'business' should you need to sell.</p><p></p><p>Don't just look at what it costs to get into the 'business' but also look at what it might cost to get out.</p></blockquote><p></p>
[QUOTE="dmac1, post: 2508726, member: 60252"] Find somewhere you can invest in rental properties. Use your cash to buy with enough down payment on each property to just generate a little positive cash flow. You will have tenants buying real estate for you over time. It's a lot safer than 'investing' in a fedex 'business' that has no real history over time of both generating income AND appreciating. You can hire a property manager- just get a good one that will keep your property well maintained. Then you can sit back, collect rent, get a real job, and between the appreciation over 15-30 years, have the benefit leveraging your cash. Even during the 2006-2009 crash, rents never really decreased. If you are handy and want to be involved, you can do almost all normal maintenance yourself. You won't be tied to your job as much because of the rental income. If you were considering driving one route or driving even part-time as an owner of fedex routes, rumors have been around that fedex will not allow owners to be drivers much longer. That will greatly decrease any potential income. Unless you pay minimum wage, which is going up almost everywhere, it is hard to make 10% of gross pay as net profit after paying wages, vehicle expenses, taxes, etc, plus any loan payments if you finance. I paid my drivers decently, got my routes for free, and only made maybe $10- $20 per day per driver, plus had all the headaches to deal with when you have employees. With $200k, you can control 5 decent rental properties or an apartment building in many areas of the country, and generate cash flow, pay down the debt, plus get the appreciation working for you. If you buy a $150k home with $40k down, with rent around $1000 a month where I live, you would net a couple hundred per month after expenses. In 7 years, you'll owe $100k, and the value would be around $175k based on history. On your $40k investment, you can get back $75k plus the cash flow. Or you refi, lower your payment, and increase your cash flow. For a $200k investment, that means your net value of the properties would be $375k. If you invest $200k in routes, in 7 years, it will still be worth about the same plus only inflation because fedex isn't going to make it more profitable for you. The vehicles decrease in value, the tax write-offs for those vehicles drops, and you need to plan for replacement. A lot of people don't count depreciation as a real loss, but that depreciation does come off the market value of the 'business' should you need to sell. Don't just look at what it costs to get into the 'business' but also look at what it might cost to get out. [/QUOTE]
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