As of this week, I'm approaching the end of my real estate course. According to the little progress bar on the bottom of my screen, it says I'm 90% done, which should translate to about another week of studying and exams.
But as I wrap up this educational course, I've been asking myself what I plan to do with this new knowledge. I think from the beginning I never really planned to be a salesperson, or fill any job relating to real estate. I was initially drawn to the course solely because I love learning and real estate is one of those things that interests me.
- I love and have a passion for fixing up and transforming spaces. I love finding imperfect spaces and redesigning them so they are either aesthetically pleasing or serve a high capacity function.
For example, in my apartment, I've installed auto-timers on about 75% of my lights and each one is linked to an Amazon echo, so it consistently provides light into rooms when the rooms are being used and provides voice activation to turn them on/off.
The problem is I've been renting for years, so I haven't been able to apply this passion to a project/unit where it could actually return me money.
- They say that property is the best investment that you could ever make due to its potential for returns. I personally like the idea of being in more control of my investment. Compared to the stock market, where you don't have much you can do to control your investment (other than choosing the right stocks), at least with property you have a few more options.
The value of the property is still directly related to market trends, but you can do things to have your property increase in value or generate cashflow, such as renovating or turning it into a rental.
If you look at my todo list last summer, an entry labeled on July 1st, 2019, I had said I wanted to get my real estate license. The reason for wanting to do it back then compared to now is still the same. I want to be an investor. I like the idea of purchasing homes and having them generate monthly cashflow for me.
I once read somewhere in the book "Rich Dad Poor Dad" the definition of wealth: "Wealth is a person’s ability to survive X number of days forward." It's a concept that explains you can't save up to wealth. Instead you need to find a way for your passive income to exceed your expenses.
I like this definition because it has an achievable goal. With this, wealth isn't defined by a finite number like a million dollars. The problem with some millionaires is they make millions of dollars and then spend millions of dollars which makes them no different than you and me. This is a big reason why a lot of professional athletes go broke after they retire from the game.
So let's look at this concept deeper. Basically, you need to find a way to make enough passive income (income generated basically without doing anything) so that it exceeds your expenses. This is a cool idea because one approach to doing this is simply just lowering your expenses.
Some of us, including myself sometimes live way above our means. Do we really need all these excessive material objects? Do they serve a purpose or are we just getting it to fill a societal mold or status?
When you accept this ideology into your life, suddenly everything you do becomes factored into this approach. For me, I try to embrace minimalism as much as I can, but now, especially at the start of this year, I'm trying to raise my passive income.
For everyone this is different, but here are a few of my methods:
- Income generate from YouTube and Adsense (haven't posted a video in 8 months, yet I still collect $60 per month). Will be a lot more if I go back to posting regularly.
- Dividend stocks
- Having my "company" host poker night 4 times a week (after I hire someone to host it, it basically runs itself and my cut is roughly $900 per month).
- Real Estate
I'm trying to do more with my businesses this year to generate income passively, but definitely the last item "Real Estate" is my current focus. As I'm looking to buy my first piece of property, most people might approach that by choosing a "forever home". For me, I'm looking at it from an investors perspective.
I'm looking for homes that need a little elbow grease, so I can put effort into increasing its value. New paint job, cabinets or countertops can do a lot to increase a homes perceived value with very little out of pocket costs.
I'm also looking for homes that can be turned into rentals, so they need to be cheap enough where my mortgage payments are lower than average rental rates so it can be turned into a cashflow source. The beauty of this too is that a property that is cash positive has the added bonus of someone else (a tenant) paying down my mortgage for me.
So yeah I'm wrapping up my education right now and I plan in the next 4 months to start acting towards purchasing my first property. I expect to make mistakes my first go-around, but that's apart of the process.
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