On this podcast episode I talk about how to get started in real estate (to listen to the podcast, click on the white triangle in the black bar at the bottom of this page)
I see so many people that want to learn how to get started investing in real estate, but don’t know what to do to get started. I find that it helps if you can break down your ultimate goal (financial freedom) in order to create a process of workable steps that can help you achieve your vision of where you want to be in the future.
On this episode we speak about the financial freedom number of $10,000 per month in passive income. I want you to focus on this number as we progress through discussing how to get started in real estate. Why? Because if you have the end in mind, then the steps are easier. I have found many of my students mentioning this number of $10,000 as the amount of money that they would need per month in order to live comfortably without having a job.
That is why we call it the financial freedom number. It’s the amount of money you need per month to be free of a boss and a job and to be able to live your life on your terms. That is the ultimate goal. If you can achieve that goal then you will be free.
I discuss how you can easily achieve this goal by putting together a 15 year plan to own 5 houses free and clear in 15 years. If each one of those houses rents for $2,000 per month then you will have $10,000 per month in passive income.
I then talk about the steps that would be necessary for you to take to make this goal achievable. We talk about how you would need to learn how to find houses at a deep discount of at least 20% to market value in order to capture equity on every purchase.
And how you would need to market to motivated sellers in order to find these types of houses at a discount. And why to get started, your best bet is to FIRST LEARN HOW TO FIND THESE HOUSES.
And the best way to learn how to find these houses is by learning how to wholesale. If you are willing to look at the big picture (financial freedom), then you are able to understand that the small steps are building blocks that you will need to take in order to achieve your goal. It is easier to get started if you know what your ultimate goal is.
FOLLOW THESE STEPS:
First learn how to find houses at deep discounts. Understand that the way to find houses at discount prices is to market to motivated sellers. So start by marketing to these motivated sellers by buying lists of people in foreclosure, absentee owners, and other potentially motivated sellers on sites like List Source. Then learn the different types of marketing methods to contact these homeowners like mailing postcards to them. Then, when you know how to market to motivated sellers and what to say to them in order to be able to buy their houses at a discount you will be able to get these houses “under contract”. Learn how to make money by wholesaling (flipping) these houses to other investors for a profit. One of the best ways that I know for you to learn how to get started in real estate and learning how to wholesale and flip houses is to attend my Wholesaling Real Estate Boot Camp.
Build up your capital by saving the money from these wholesale flips. Save up your cash until you have enough money to start buying rental properties (and doing fix and flips). When you have enough money saved up, find rental properties that you can purchase for no more than 80% of After Repair Value (all in including the cost of the repairs). Then buy the property, repair it, rent it out, and refinance the house. I recommend you use the 15 year fixed rate mortgage so you know that the home will be paid off in 15 years.
Your goal should be to pull all (or most) of your cash out after the refinance, leaving you with the same cash as when you first started. This will allow you to buy virtually unlimited houses. In reality you can buy 10 houses before lenders will start questioning how many houses you own. For this example you only need to buy 5 houses so that is not an issue.
Keep the houses that you own for 15 years, until you have paid off the mortgage and you own them free and clear. If you do the above steps, then you will have achieved your financial freedom number within just 15 years. If you buy 10 houses instead of 5 then you would have passive income of $20,000 per month!
If you want to be wealthy, you need a plan. If you have a plan to create wealth and you follow the steps above then 15 years from now you will be wealthy!
Click on the white triangle in the black bar at the bottom of this page to listen to the podcast.
