subject: Passive Income Creation Investing in Positive Cash Flowing Real Estate For Beginners [print this page] Passive Income Creation Investing in Positive Cash Flowing Real Estate For Beginners
One of the most fundamental and sound methods for creating a passive income stream and wealth building is with real estate. Real Estate has stood the test of time; we live in a world where everyone requires a roof over their heads. As the saying goes, that is what makes this niche, this business especially in the climatic areas we live in here in Canada and the USA. This vehicle or system if you will can be very simple. Once established you want to continue repeating the process until it delivers the amount of passive income you require for yourself and your family.
With all considerations isn't it exactly what real estate offers? You pick your niche market, you decide the entry level and it is all about your comfort zone. The niche will be decided by the disposable cash you have for financing the first investment as well as what price level you can afford as an investment. The portfolio you develop will also depend on your willingness to deal with tenants. If you are very hands on you will need to determine your market segmentation. This could be small 2 -3 bedroom houses, condos, duplexes, triplexes, etc apartment buildings ranging in sizes of 6, 12, 18, 24 units, etc. The entry level will depend on your credit and available cash for the effective down payment of this first investment and of course how much you want to be implicated in the daily management of these investments.
It all begins with your first investment. Real estate can be very rewarding and it can also be very humbling so it is essential you acquire a level of education, to know where, what and how to succeed at this business. Building your wealth and your retirement nest egg doesn't happen by itself. Lets be very clear on one thing, real estate is a business and a serious one at that. So you need to treat your new business that way by elaborating a precise game plan to reach your goals.
Think of this business you're building as your Golden Goose. That Golden Goose will then produce some golden eggs. These golden eggs represent your passive income. The importance of reinvesting your golden eggs will determine how fast you reach your financial targets or goals if you will. Your priority now is to determine your goals short, medium and long term. Normally your portfolio will have certain investments set up in the same way as your goals, short, medium and long term.
Your real estate portfolio may be composed of investments for the long term buy and hold. Others will be for appreciation and cash flow but for perhaps a shorter term medium hold. At times you may come across really good sound short term undervalued property that may require some short term investment say to bring the property up to value that you can then turn around and sell for a quick profit.
Remember as you are strategizing your portfolio your tenants are paying down your mortgages (dept) creating cash value in your properties which in the mean time continue to appreciate in value. As you continue to add properties to the portfolio your daily management requirements increase which leaves you working in the business rather than on the business where you can maximize your cash flow and property value. This can be overwhelming and stressful as you consider your current job and family life to deal with as well; and often causes you to loose sight of the desired end result.
With a larger portfolio and more cash flow you can probably hire a property manager to take care of the daily, weekly and monthly activities for you. But then how do you find a reliable and trustworthy property manager? That is the value of being part of an investor group where you can view different opportunities that come and where you can find properties with property management in place offering turn key projects at a competitive price.
The value of turn key projects can be a very advantageous model if you are short on time and don't want the challenges that come with managing properties. That is another value that an investor group can bring along for you. It does not lock you in; it does offer flexibility. It will bring you opportunities you probably would never see or even hear about at greater discount and additional value with a secure and long term rental programs in place.
I encourage you to remember this "Real estate investing" is really about opportunity meeting the right timing''. When you are prepared, open and plugged in these opportunities can create great leverage of wealth that can catapult you ahead in your quest for financial freedom and escape from the rat race. In closing I encourage you to do extra research and sound due diligence on investor groups; they don't have to be in your back yard or even in the same city. Today with the world of the internet, I phones and blackberries and what not we can be plugged in twenty four hours a day.
I wish you success in your quest for financial freedom with successful investment models and opportunities. For more education you can subscribe to The Zen Investor articles, newsletters and blogs to find out what is happening in the real estate world, the how to and the where's it at all of this is at your fingertips for free.
