When Should You Begin Learning How To Invest In Real Estate For Passive Income?
Many people think you have to be financially well off to begin investing in real estate, but that is not the case. There is no need to be a trust fund baby or earn a six-figure income to start investing in real estate.
You don’t need a lot of money or life experience to begin your investment journey in becoming successfully unemployed by making passive income through real estate investing.
There are quite a few entrepreneurs, like Rachel Richards, who began investing in real estate in their early-to-mid-20s and having great success doing so.
This Is How You Can Start A Career In Real Estate Investing While You Are Young
- Save a large chunk of your salary and reinvest your capital gains into more real estate properties.
- Live in a less expensive neighborhood, city, or state. Downsize if possible.
- Be very frugal with your lifestyle spending habits. Ask yourself if it is a want or a need before purchasing.
- Increase your income with side gigs or part-time jobs.
- Be very disciplined in saving and spending. Set high but realistic goals.
- Get over your limiting beliefs. Always believe everything is possible.
- Find a successful mentor willing to teach you what they know.
The key is to live with less now so you can have even more in the near future. The goal is to just get started in real estate investing in some capacity. Start small and grow.
You could own enough single, multi-unit, or commercial properties to leave your dead-end J.O.B. within a couple of years. Becoming financially independent and living off ten grand a month in passive income sounds great, right?!
How to Quit Your Job with Passive Income
Get the Best Selling Book FREE!
Why work Just-Over-Broke for a boss who only pays you just enough to keep you working without quitting, but not so much money it takes money out of their pockets? Your value is so much more than anybody could ever pay you.
You Have More Time To Build Your Real Estate Investment By Starting At A Younger Age
Why waste seven or eight years before you begin investing in real estate? Both time and money are fragile commodities; once they are lost, you can never have them back.
Benjamin Franklin said it best, “Time is money.”
Many investors who waited till they were older or until they felt financially sound regret that they did not start investing in real estate sooner. They feel the financial security loss of not starting to invest in their future wealth.
Eight Great Ideas You Can Work On While Saving Capital For Your First Real Estate Property
- Narrow down your parameters. Discover what type of property you want to invest in. Single-family home, duplex, or commercial real estate.
- Narrow down your location. Get the most bang for your buck. Weigh the property price, fees, restrictions, and tax advantages.
- Start building your team. Find good real estate agent, property managers, and reliable contractors.
- Find a successful mentor, like Ramit Sethi, to shadow.
- Attend seminars and network with other real estate investors.
- Watch how-to podcasts and YouTube videos.
- Read finance and investing books like The Millionaire Next Door and Rich Dad Poor Dad.
- Explore methods of creating financial capital. House hacking, wholesaling, the BRRRR method, owner financing, silent partnership, and raising private capital are just a few examples.
Your Mindset Will Determine Your Success When Investing In Real Estate
Short-term thinking leads to instant gratification that promotes a lack of discipline while saving for real estate capital and creates less intentional spending on our needs and wants.
Long-term thinking is looking at the big picture of life. Asking the question, “What can I do today that will create long-term value for my well-being?” You must create a five-to-ten-year wealth-building plan that includes real estate strategies.
For example, Short-term thinking is paying $40,000 for a traditional wedding that lasts one night. Long-term thinking is investing the same $40,000 in a real estate property that creates passive income from tenants who pay monthly rent for as long as you own the property.
Do you want to pay for an overpriced one-day event or create wealth that will last for years?
Do you want joy for now or value for a lifetime?
Sacrificing right now may be painful, but you could begin living beyond your dreams in just a few short years with real estate investing.
Don’t think that all is hopeless and not worth the delayed gratification. You can afford to splurge on life’s little guilty pleasures when you find the right balance between decreasing your expenses and increasing your income.
Be creative, explore different income streams, use discounts, and start investing in passive income real estate properties as soon as possible.
You Don’t Need Money To Start Investing In Real Estate.
There are many creative ways to finance your real estate capital.
Here are a few ways to invest in real estate without a 20% down payment.
- House Hacking – Rent out all or part of your personal residence.
- Wholesaling – Be the middleman between the seller and the third-party buyer.
- BRRRR Method – Buy, Rehab, Rent, Refinance, Repeat
- Owner Financing – The seller becomes the bank approving your mortgage loan.
- Silent Partner – Provides capital but is not involved in the day-to-day operations of your real estate business.
- Raising Private Capital – A friend or relative willing to loan you capital money for the payment of interest.
Other Lessons To Know When Beginning Your Real Estate Investing Career
Although you are young and just starting your real estate investing career, this is not the time to cut corners by hiring a cheap team.
You will spend a lot more money and add avoidable hard-knock lessons to your real estate investment dreams by trying to save money when hiring your management team.
Spend your money on licensed, insured, and reputable team members. Interview them over and over until you know in your gut that they are the right choice for you and your real estate investment business.
Choose A Real Estate Agent With Investment Property Experience
Invest in an agent who has experience in selling investment properties. You want someone knowledgeable about the area where you are considering buying investment properties.
Interview, interview, interview. Interview until you know they are the best fit for you and your business.
Look at their portfolio history. Compare commission rates and services. Make sure they are licensed and bonded.
You could also become your own buyer’s agent by obtaining a real estate license.
How to Quit Your Job with Passive Income
Get the Best Selling Book FREE!
The real estate license allows you to earn an agent’s commission on every sale. You act as the buyer’s agent on all your real estate purchases and use the earned commission as part of your capital for the next real estate property.
Spending a little money upfront for a real estate course is an excellent investment in the long run.
You Want To Hire A Property Management Companies Instead of Individuals To Oversee Your Investment Properties
Avoid using individuals, such as family and friends to oversee the day-to-day operations of your rental properties. You want to hire professional property management companies.
Property management rates range between eight-to-fifteen percent of the rental price, but these professional fees are worth the peace of mind that they will be held accountable if anything goes wrong on their end.
Only Hire Licensed Contractors And Purchase Quality Replacement Products For Your Real Estate Investment Property Needs
A licensed, insured, and reputable contractor is invaluable when relying on them to maintain or repair your property. You want them to do the repairs right the first time and use quality products.
Reading reviews and comparing services versus prices is key to finding the right contractor.
Asking for referrals from people you know, trust, and value their opinion is another good source when looking for a repair contractor or replacement products.
How To Scale Real Estate Investing Quickly To Own Multiple Real Estate Properties And Earn More Passive Income
It is time to scale your investment business once you have purchased your first, or maybe a few, real estate properties.
The Best Advice From Expert Real Estate Investors Is To Be Debt Free And Understand Financial Management
Pay off old debt as soon as possible. Reinvest the capital you gain, from rental revenue and property sales, into new real estate properties.
Learn about finance management and how it applies to real estate investing.
You don’t have to be a finance nerd but knowing how to get the most bang for your buck is beneficial. Start by understanding debt-to-income ratios and real estate financing methods.
Begin investing with lower price properties and work your way up to more expensive real estate properties.
A small duplex or single home can offer monthly passive income that can be saved and used on a larger property a few months down the road.
Plan to supply your down payments through the options of 50% savings rate, 100% commission check, and 100% cash flow net profits from tenants.
Before you realize it, you will see the snowball effect at its best!
More about Rachel Richards
You can find Rachel Richards on Instagram and Facebook at @moneyhoneyrachel.
Her website is Money Honey Rachel.
She has also written two books: Money Honey and Passive Income Aggressive Retirement.
Rachel is also offering a free download of her Passive Income Starter Kit.