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4 Ways To Make $10K A Month

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The goal to make $10,000 a month in passive income is just a long-shot dream, right?

Probably. I don’t even know why you’re reading this article…

Wrong!

If you’re looking for 5 more generic steps to take to never reach your goals, then stop reading now.

If you’re looking for “buy my program and you’ll be earning 6-figures and can quit your job” then you also should look elsewhere.

Instead, keep reading if you’re looking for some real solid steps on how to grow and build your passive income to a level that can replace your day-job.

How Can I Make $10,000 per Month?

The first question to answer is “how exactly do I make $10,000 per month?” There are really only 4 ways to earn $10,000 a month:

  • Get your boss to give it to you (earn it at a job)
  • Earn it yourself (become self-employed)
  • Create it (own a business)
  • Grow it (from investments)

This is a summary of the 4 general ways to earn income – employee, self employed, as a business owner, or through investments. It’s also called the ESBI model. The list is also ordered from least desirable to most desirable.

When you decide “I want to earn $10,000/month” you need to decide what path you are going to take first then refine it into ‘how’.

So, let’s start with the worst ways to create $10,000 and work our way up to the best.

How to Earn $10,000 a Month as an Employee

If grinding your way through life at a corporate job is your definition of success, then this section is for you. There is only a tiny bit of sarcasm in that sentence…

Your wages are loosely tied to the value of what your contribute to your company. It’s more closely tied to the supply and demand of similar workers as you.

So, to earn more, you have to be better than everyone else around you. To do that you need to:

  • Work harder
  • Work longer
  • Have a skill or knowledge that is hard to replicate

To accomplish this is easy. Work more efficiently and harder than everyone around you. Then, work twice as long as everyone around you.

Do that for 5 or 10 years and eventually your employer will recognize the work you do and you’ll probably make 6 figures. You just need to get there before a younger person is willing to work even harder and longer than you for half the wage.

It’s a bit harder to acquire a skill or knowledge that others cannot replicate, but you could pay for training courses, additional schooling, or study on your own to increase your skills in your field.

Earning $10k Being Self Employed

The benefit to being self employed is that every bit of work you do goes straight back to you.

You do not need to work extra hard and hope that your employer notices and gives you a raise. If you work twice as much, you’ll hopefully see twice as much income (assuming all of the effort you put in generates more revenue).

I think that being self-employed is a great way for people to get started building their income. Everyone talks about investing, but you probably need extra income first before you can start investing.

BEING SELF EMPLOYED, I’M LOOKING FOR:
  • Very flexible schedule
  • High payout on a sale
  • Can be automated, outsourced, or grown organically

The first couple things that come to mind are consulting and real estate.

I like consulting because it is a high payout job and also offers a very flexible schedule. It’s not something that can be totally outsourced, as people expect their consultant to be the one consulting them.

Being a real estate agent is also highly flexible and has a very good payout. It’s also very automatable (is that a word?). Almost every step of the process can eventually be outsourced to an assistant, VA, or other real estate agent.

It also costs very little to get started, has few barriers to entry, and is easy to take market share because most people don’t have an existing relationship with a real estate agent.

Another reason I like the idea of being a real estate agent is because when you do get started investing in real estate, you’ll have a leg up on other people. Hint: this is exactly how I got started in real estate.

Getting Started as a Real Estate Agent

Becoming a successful real estate agent is super simple (though it requires a bit of effort!). Just follow these steps:

  1. Take your licensing coursework (I like Real Estate Express to fast-track it)
  2. Take your tests (both state and federal)
  3. Determine your niche and ideal clients
  4. Find a good brokerage to hang your license
  5. Find clients and close deals

Taking Your Real Estate Agent Coursework

Every state has its own licensing requirements. Some are easy while others are hard, so it’s important to get the best coursework that will make you the most likely to succeed.

That’s why I always recommend Real Estate Express. They offer all of your coursework for ridiculously cheap. It’s all set up to get you through the coursework quickly and give you the best chance of passing your test.

Taking Your Tests

There are two tests to take – the federal and the state real estate exam. They aren’t hard, but you do need to prepare for them.

I recommend scheduling the test as soon as you’re done with the course and taking it as soon as possible.

A lot of people schedule it several weeks or months away to give them “time to study” but I don’t think this is generally true. Generally, you know the most the day you complete the course, and every day after that you lose some of it.

So just get it over and done with asap!

Determine Your Niche

There are hundreds of niches to choose from, so be selective and master one or two.

I personally think that being a residential agent for real estate investors is the perfect niche. Here’s why.

Being a commercial broker is really hard, especially for new agents. The top producers have been doing it for years and everyone knows them. Taking market share is next to impossible for a newbie.

Being a retail agent that works with new home buyers is fine, but they are a dime a dozen and setting yourself apart is really hard.

Being an agent for 1-4 unit residential properties, but working exclusively with investors is the perfect mix. You have a good niche that is focused yet broad enough.

Additionally, investors are logical rather than emotional. They also buy on a regular basis (every year or more than once a year), and don’t care what the place is as long as the numbers work.

So, they are far easier to work with and buy more often. The only drawback is they tend to buy less expensive properties, so you need to do more transactions.

Find a Good Brokerage

The key is to remember that you are interviewing the brokerage, not the other way around.

So, shop around to find one that fits your goals and niche in real estate.

Find Clients and Close Deals

Finding clients is tough! It’s especially tough for the newly self-employed.

Fortunately, there is a service called Agents Invest which connects you to your ideal client. Agents Invest has a boat load of active investors who are looking to buy properties.

You just need to contact them and see if it’s a good fit. So go check them out!

How to Earn $10k per Month as a Business Owner

This is really simple.

Step 1 – Start a business.

Step 2 – Grow your business

and… Step 3 – Earn $10k/month.

Alright, it’s not that simple! I’ve started 3 different businesses and there is a lot that goes into running and growing a business.

If you already have a business, there are two ways that I have found to help you grow. The first is to find whats working for you, and double down on that. The second is to find new revenues sources on the fringe of what you’re doing, or through upselling.

Most people that want to grow a business tend to focus on doing more, but that often ends up with earning less.

I recently had a conversation with a mortgage broker. He said the issue with most brokerages is they want to do every type of lending (multifamily, retail, manufacturing, etc). The problem is, they become just like everyone else out there and nothing sets them apart.

They are not an expert at anything.

Instead, by focusing in on one specific type of lending and becoming an expert at it, the business grows faster and earns more.

Now, if you don’t already have a business in real estate you want to double down on, you might want to start one.

Starting a New Business

If you’re going to be investing in real estate, it probably makes sense to have a business in the real estate field too. There will be synergy between the two and it will ultimately help you invest in the future.

There are a ton of different real estate related businesses that you could start. Literally, dozens or even hundreds of niches to choose from.

If I’m choosing to start a new business I want it to have a few basic criteria.

  1. I want to be able to automate it (though I can do the work myself to start if I choose)
  2. It should be scalable
  3. It should be relatively inexpensive to start

While there are a ton of options available, I’d probably choose to start a wholesaling or lead generation business.

I like this because it hits all 3 of my criteria and it also ties in well with real estate investing. Any time I want to buy a property for myself, just take the best leads and keep them for myself rather than sell them.

Here’s how to get started

Determine Your Niche in Real Estate

It’s important to decide what niche you want to be in. Here are a few popular niches:

  • Multifamily
  • Single Family
  • AirBnB
  • Vacation Rentals

There are more, but those are probably the top 4.

It’s important to know your niche so you can tailor your content and lists to this area.

Build Your Funnel

It’s important to figure out how you will generate leads. This is how most wholesalers fail.

Remember, you have to get your name out there and be the first to find the potential seller before others do. That’s why I love using the internet.

Most people go to Google before ever making a buying or selling decision. That’s why if you can rank your website on Google, people will probably find you first!

If you want to be first to find them (by having them come find you) then what you need is a lead generation website.

For that, navigate to Investor Carrot and put your info in on the next page to get a free trial.

You can also read more about building out your Carrot site on this recent article I posted.

Decide What To Do With Your Leads

Once leads start coming in, you’ll need to decide what to do with them.

If you want to chase them down yourself and put deals under contract, great! If not, you can easily sell your leads to wholesalers in the area. That’s what I do.

I think working an agreement with another wholesaler for a profit share is the best way to do it as it requires the least amount of effort for the most return.

Making $10,000 A Month as an Investor

The one we’ve all been waiting for, drum roll please…

Making money as an investor is all about building up multiple streams of passive income. One of the best ways to do that is with real estate.

Every property you buy is another stream of income to add. Every unit, every tenant, it all adds to your goal.

The biggest risk to real estate is the lost revenue during a turnover or eviction. But, as you buy more property, this averages out.

For example, if you have one house you either have 100% occupancy or 100% vacancy. So, you do great some months and terrible in other months.

But if you own 10 units and 1 is vacant, you’ll have 90% occupancy.

If the vacancy rate in your area is 10%, you can expect to always have 1 vacant unit. At this point, it just gets built into your normal operating budget.

Here are the steps to getting started in real estate

Get an Education

The most important part is to learn everything you can about real estate investing. You need to understand how to estimate market value, repairs, rents, your operating budget, etc.

To do this, I recommend this inexpensive eCourse to help you get going.

It’s too easy to make mistakes in real estate, but that shouldn’t stop you from getting started.

Instead, learn from others mistakes first, and the best way to do that is to take their course.

Get an Agent

You don’t need an agent to invest in real estate. If you have build out a lead generation website, then just use those leads to buy deals.

But, if you don’t have any source of leads, the best place to start is with an agent.

For this, I recommend the service Agents Invest, which connects investors to investor savvy agents around the country.

Make Offers

A lot of people don’t ever find a deal because they are afraid to make offers. If a deal is listed too high, simply make an offer for less.

Don’t be scared of making offers!

I once offered less than half of what a property was listed for (and got it). So, it happens. Just recently a good friend of mine negotiated over $150k off a deal that was only listed around $500k to begin with.

That’s a 30% savings!

So, it’s totally possible to do, even in a hot market!

Do a Combination to Earn $10k/month

The last option is to do a combination of the above to get to $10,000 per month.

If you are self employed, own a small online business, and also have some real estate with some passive income, that combination might get you to your goal as well.

Your Turn

What are you doing to reach the goal of $10,000 per month? If your goal is higher or lower, tell me what your goal is and what you’re doing to achieve it.

This article originally appeared on IdealREI. Follow them on FacebookInstagram and Twitter.

Real Estate Investing

The No. 1 Strategy To Build A Rental Property Empire

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It’s impossible to buy enough rental property to retire with, right? It simply takes too long to save up, buy property, and a little rent over years

You just need too much money for down payments to keep buying.

Wrong.

It’s true that buying rental property is a very capital intensive process and it’s true that you generally need 20-25% down for your purchases (except your first few which can go FHA or VA).

It’s also true that most people don’t have unlimited funds and can’t keep putting 20-25% down.

But here’s the thing – you don’t have to keep putting money down.

There’s this really simply strategy that allows you to avoid doing all that. You guessed it, it’s called the BRRR strategy and I’m going to go into that in a lot of detail. But first…

A quick story about how I retired using the BRRR real estate method.

BRRR Strategy During the Great Recession

A long time ago I started using the BRRR strategy before anyone ever called it the BRRR strategy.

In a nutshell, it’s a way to buy property that allows you to preserve capital in order to buy more and more properties over time.

I’m going to get into detail on it in a minute, but I want to take you back to 2009 through 2013 during the deepest part of the great recession.

No one had jobs. No one could afford to pay rent. Housing prices dropped like a rock and flat lined like a hospital patient. There was no bounce.

It was just despair everywhere.

They call it the great recession, but in historical terms, it was clearly a depression.

…and I decided to get into real estate.

Everyone said I was crazy, and I was a little crazy. A lot of people had just lost everything, tenants weren’t paying, evictions were happening all over. It was rough.

But, deals could be found everywhere. The other benefit was since no one had work contractors were easy to find and would work for 1/3 what they charge now.

The hard part was finding money to invest and finding banks to lend.

I bought my first 3 family in 2009, then bought a 4 family a few years later in early 2012. This is a picture of the 4 family, sexy isn’t it?

By 2015 I had over 20 units. By 2017 I had around 35, and now in 2018 I’ve moved up to apartment complexes and have over 470.

This is the strategy I used to keep buying more property while continuously putting more money in my pocket.

Here’s how brrr investing works in real estate.

Using the BRRR Strategy to Build a Rental Property Portfolio

The overall Gist of the BRRR method is to add enough value to a property that when you refinance it you will get most, if not all of your capital back. This allows you to take your money and use it over and over again to buy deals.

Just in case you aren’t yet aware, BRRR stands for Buy, Rehab, Rent, Refinance. Alternatively, some people call it the BRRRR method which stands for the exact same thing, except the last R stands for “repeat.”

So, BRRRR method is Buy, Rehab, Rent, Refinance, Repeat.

Step 1 – Buying

There are 3 basic parts to buying any property – finding, analyzing, and closing the deal.

Finding a Deal

The most important part of the BRRR real estate strategy is to find great deals. Without an amazing deal, it simply doesn’t work (but that’s kind of true about making money in real estate anyhow).

In general, people refer to deals as either “off-market” and “on-market.” An off-market deal is essentially every sale that is not listed with a real estate salesperson on a listing service such as the MLS, LoopNet, or CoStar.

There are a ton of ways to find great off-market deals. These includes:

  • Starting an Investor Website
  • Direct Mail
  • Knocking on Doors
  • Bandit Signs
  • MLS
  • Bird-Dogs

…and a couple dozen more methods. The only thing limiting you is your imagination!

Analyzing Rental Property

It’s important to have a couple different calculators to get this job done. The most important is your “back of the napkin” calculator.

The reason why a calculator like this is so important is because you will literally look at hundreds of deals. It’s impossible to use an advanced calculator and cull through dozens of deals a week.

Instead, it’s best to use a very simple calculator, toss in the basic numbers, and just see if it’s even remotely close.

Once you do that, you can take the deal and do a deeper analysis. If it’s not any good, just toss it aside and you’ve saved hours of your time.

I put together a free BRRR calculator for you to use to screen deals.

Closing Deals

The most important part of closing a deal is….financing it.

We’ll talk a bit more about financing at the end when we talk about the third R – Refinance, but it’s important to know that your financing up front will be different than how you refinance the deal.

Up front, you are generally using cash or some kind of private or hard money. Banks don’t like risk, and deals that need work are considered risky.

By using cash or private money, you’ll be able to purchase something with a bit of risk so you can add value.

The other reason is because distressed properties often need to close quickly. Banks are anything but quick.

So the key here is to use private money to purchase, then refinance into something longer term such as a good conventional or long-term commercial loan.

Step 2 – Rehab

You don’t want to rehab a BRRR rental property the same way you would fix a flip.

When you analyze a project for a flip, you look at the cost of the work vs the increase in value. If a kitchen costs 10k and increases the value by 15k, then it has a 50% return (15k – 10k = 5k return. A 5k return divided by 10k invested = 50% return).

That same kitchen may add value to your rental, but since you aren’t selling it, it’s the wrong way to measure value.

That $10k might add $15k in value, but add barely anything in extra rent. Since we are looking for cash-flow, I’d rather focus on renovations that add to the amount of rent I can charge.

BRRR Step 3 – Renting The Unit

Finding great tenants that will pay market (or higher) rents is key to your strategy. The 3 key steps are to findscreen, and retain.

Step 4 – Refinancing

The goal is to get your money back so you can repeat the process, which makes this step the most crucial.

because the rules for commercial lending are slighting different than personal lending, let’s take a quick step back and go over the rules/requirements for commercial lending:

  • You will need around 2 years of “experience.” This can be rehab experience, landlord experience, or even experience as a realtor if you can convince the bank that it’s directly applicable.
  • Most banks require 6+ months of “seasoning” before they will finance it at the market price rather than the purchase price. This means the property has been stable, fixed, and rented for around that period of time. Basically, they need you to justify the higher price with some evidence of stability and improved rents.
  • Banks lend 75-80% of appraised value on this sort of deal.

It’s not hard to see the “trick” once all the criteria are laid out.

  • Banks will lend around 75% of the appraised value after 6 months of seasoning.
  • House flippers are looking to be “all in” for around 75-80% of the property value.

So, buy a rental property like you’re going to flip it, then just refinance it – you’ll get all your cash back plus long-term rental income.

But, in order for this system to work well, you need to be able to be “all in” for around 75-80% of value.

Step 5 – Repeat and BRRR More (aka brrrr)

Once you have most or all of your money back, it’s time to find another real estate deal to BRRRR! The extra R stands for Repeat.

You’ll have your cash back and a new stream of income. Could life get any better?

Have you ever used the BRRR Strategy? Tell me how it went in the comments below.

This article originally appeared on IdealREI. Follow them on FacebookInstagram and Twitter.

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5 Strategies To Close Your First Real Estate Deal

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