Creating a recurring revenue stream?? (loan, small business, real estate, buy)

[thedreamteam]

so here's the deal.. the wife and i were lucky enough to cash out our real estate holdings a couple yrs back during the boom.. i will be the first to admit we were at the right place at the right time more than we were smart.

after careful consideration we invested close to $350k of this amount into a franchised restaurant where we partnered with corporate themselves. they are running and managing the operation and cutting us a dividend that pays out anywhere from $5k to $10k per month to start and closer to $15- $20k per month once the small business loan has been retired in 3 yrs. the product mix is heavily weighted toward alchohol so it has endured the recession quite well.

we have made the conscious decision that the wife will not be returning back to work after our next baby and i have also accepted a package from my employer through no choice of my own. which means we have to put the remaining funds to work for us. we considered investing into a second restaurant with the same franchise, but know enough about finance and life that its very dangerous to put all your egss into one basket.

which brings me to my question.. how can we create a recurring revenue stream/income from the $250k-$300k equity we have left? nothing is below us and i am willing to roll up my sleeves and get dirty if thats what it takes. any business or investment idea will be considered, but it has to be an absolute home run as this is quite a significant amount for us.

i don't normally sollicit online feedback when it comes to personal finance decisions, but have gained a fair bit of respect for some of the posters on this business forum and am willing to listen and learn. thanks in advance everyone.

[las vegas drunk]

You might want to look into forex trading. I know a few people who are making a good living trading forex at home. I personally can not do it because I do not have the start up capitol, but you do. For example, I know one guy who consistently makes between $7,000 to $10,000 every month trading with a $100,000 account. Here is a site that explains forex very well and is free to use....

babypips.com

[Teak]

You want *my* advice?? I think that I need to get your advice.

I have heard both sides: diversify, and then the crowd (including Warren Buffett) that says just find good businesses to put your money into even if they are not that diversified. Why not look at corporate bond funds (fixed income) or consistent dividend-paying companies (e.g., Johnson & Johnson, Procter & Gamble, Altria)? This represents part ownership of businesses that are pretty consistent in both up and down markets.

Otherwise, why not look for a managed-care franchise that would be similar to your restaurant setup? Not all Baby Boomers will be able to move to Costa Rica or Mexico; some will have to stay in Toledo and Dodge City.

[scuba steve]

Rental housing. Because people will always need somewhere to live. Prices have already fallen and in the long run you'll be great.

Buy land in put up a self-storage place. As the town or city develops out the land will be worth more later, and at that point you can sell it for redevelopment.

[pghquest]

Originally Posted by thedreamteam

so here's the deal.. the wife and i were lucky enough to cash out our real estate holdings a couple yrs back during the boom.. i will be the first to admit we were at the right place at the right time more than we were smart.

after careful consideration we invested close to $350k of this amount into a franchised restaurant where we partnered with corporate themselves. they are running and managing the operation and cutting us a dividend that pays out anywhere from $5k to $10k per month to start and closer to $15- $20k per month once the small business loan has been retired in 3 yrs. the product mix is heavily weighted toward alchohol so it has endured the recession quite well.

we have made the conscious decision that the wife will not be returning back to work after our next baby and i have also accepted a package from my employer through no choice of my own. which means we have to put the remaining funds to work for us. we considered investing into a second restaurant with the same franchise, but know enough about finance and life that its very dangerous to put all your egss into one basket.

which brings me to my question.. how can we create a recurring revenue stream/income from the $250k-$300k equity we have left? nothing is below us and i am willing to roll up my sleeves and get dirty if thats what it takes. any business or investment idea will be considered, but it has to be an absolute home run as this is quite a significant amount for us.

i don't normally sollicit online feedback when it comes to personal finance decisions, but have gained a fair bit of respect for some of the posters on this business forum and am willing to listen and learn. thanks in advance everyone.

It depends on how long you are looking to hold your investment and what type of risk your willing to accept. If your looking for simple revenue stream, safely, then possibly look at a NNN leased property, leased to government agencies. On $300K, you could buy $1M property yielding a nice return.

If your looking for a higher return but more work, possibly duplicating your business in another location and being a hands on manager might work well. You have some knowledge and obviously your partner does to help.

[killer2021]

Originally Posted by scuba steve

Rental housing. Because people will always need somewhere to live. Prices have already fallen and in the long run you'll be great.

Buy land in put up a self-storage place. As the town or city develops out the land will be worth more later, and at that point you can sell it for redevelopment.

That is what I would do. When investing for the long term revenue streams you need to buy stuff that everyone needs and provides value to them. Food, water, electricity, and shelter.

I agree with the rentals. Look up into it and don't do anything stupid.

[ndfmnlf]

Originally Posted by thedreamteam

so here's the deal.. the wife and i were lucky enough to cash out our real estate holdings a couple yrs back during the boom.. i will be the first to admit we were at the right place at the right time more than we were smart.

after careful consideration we invested close to $350k of this amount into a franchised restaurant where we partnered with corporate themselves. they are running and managing the operation and cutting us a dividend that pays out anywhere from $5k to $10k per month to start and closer to $15- $20k per month once the small business loan has been retired in 3 yrs. the product mix is heavily weighted toward alchohol so it has endured the recession quite well.

we have made the conscious decision that the wife will not be returning back to work after our next baby and i have also accepted a package from my employer through no choice of my own. which means we have to put the remaining funds to work for us. we considered investing into a second restaurant with the same franchise, but know enough about finance and life that its very dangerous to put all your egss into one basket.

which brings me to my question.. how can we create a recurring revenue stream/income from the $250k-$300k equity we have left? nothing is below us and i am willing to roll up my sleeves and get dirty if thats what it takes. any business or investment idea will be considered, but it has to be an absolute home run as this is quite a significant amount for us.

i don't normally sollicit online feedback when it comes to personal finance decisions, but have gained a fair bit of respect for some of the posters on this business forum and am willing to listen and learn. thanks in advance everyone.

I have somewhat more than your stated amount sitting in municipal bonds, and TIPS. Another chunk is sitting in dividend paying stocks. The income stream is steady and reliable, and I don't have to lift a finger to receive the income - it's all automatic. Passive income is the way to go. I'm still keeping my day job, but it's comforting to know that if I were to quit working tomorrow, I'll continue to receive a "paycheck".

[forest beekeeper]

You are doing great already.

Rental housing: folks will always need a home.

Booze: folks will always drink.

Self-storage: well, I don't think so. Usually it makes good money, but when folks lose their jobs, they will stop paying. So your stuck auctioning their junk.

Restaurants: folks will always need to eat. But as we are seeing when things get tight, folks stop eating out.

Farmstands: organic or not, folks will buy produce from a roadside stand. No matter how hard things are, folks still need a source of food.

I was recently looking at a motor-rewind shop. It is currently a one-man operation, the guy is elderly. He has the equipment and the demand that he could expand to having four employees and still keep them all busy. He takes in automotive starters and alternators, rebuilds them and sells them back to local repair shops. So long as folks are driving cars ......

As you have seen partnering can be good. Use a lawyer to setup the partnership; a separate book-keeper; an independent accountant each year.

[killer2021]

Originally Posted by forest beekeeper

You are doing great already.

Rental housing: folks will always need a home.

Booze: folks will always drink.

Self-storage: well, I don't think so. Usually it makes good money, but when folks lose their jobs, they will stop paying. So your stuck auctioning their junk.

Restaurants: folks will always need to eat. But as we are seeing when things get tight, folks stop eating out.

Farmstands: organic or not, folks will buy produce from a roadside stand. No matter how hard things are, folks still need a source of food.

I was recently looking at a motor-rewind shop. It is currently a one-man operation, the guy is elderly. He has the equipment and the demand that he could expand to having four employees and still keep them all busy. He takes in automotive starters and alternators, rebuilds them and sells them back to local repair shops. So long as folks are driving cars ......

As you have seen partnering can be good. Use a lawyer to setup the partnership; a separate book-keeper; an independent accountant each year.

yup you need to buy stuff that people always need. Just look at what is going on today, people are cutting off all the non-essentials. They aren't turning off the lights or water. They don't stop paying their rent (they however, will rent a cheaper place rather than the luxury place. Hence, only buy studio, 1 bedroom or two bedroom non-luxury rentals.)

Restaurants...out
malls...out
designer clothes...out
luxury cars.....out

Also they are lowering the amount spent on their budget. They will still go on vacation but they aren't going to go on the 5,000$ cruise, rather they're going to go to the local theme park for a week. They aren't going to stop going out, rather they aren't going to go to the luxury spa. They're going to the 10$ movie.

I have somewhat more than your stated amount sitting in municipal bonds, and TIPS. Another chunk is sitting in dividend paying stocks. The income stream is steady and reliable, and I don't have to lift a finger to receive the income - it's all automatic. Passive income is the way to go. I'm still keeping my day job, but it's comforting to know that if I were to quit working tomorrow, I'll continue to receive a "paycheck".

Always a good idea but remember with the bonds, we are in a pretty bad time. When governments can't raise enough capital to finance deficit spending it kills the value of bonds. They issue bonds which will dilute the value of your bonds. If worse comes to worse they print money which causes inflation and once again dilutes the value of your bonds. At least when you are in dividend stock the overall company should raise its prices during inflation, hence, the overall profitability goes up of the company. Stable, conservative passive-income investing is the way to go! REITS would be good buys if they weren't leveraged to the hilt. I personally think oil companies and MLPs are good buys right now.