The real estate investing industry has a lot of get-rich-quick gurus who will try to convince you that it’s brain-dead-easy to amass a Donald-Trump-sized portfolio using no money down and to retire by next week.
I’m here to breathe a little reality into the industry. Is it possible to amass a large portfolio of real estate that raises your net worth considerably? Yes. Is it possible to do easily by the end of next week? Uhhh… I think the fact that you’re reading THIS blog post hints at the answer.
Real estate investing can allow you to get rich but you should expect to grow your wealth and your investment portfolio in modest, sensible steps over time, allowing you to achieve financial freedom in a few years and a retirement as comfortable or luxurious as you want.
Here’s how to get rich slowly in 5 steps:
Step 1. Start With One Property
Many people want to invest but a surprising few actually pull the trigger. The step from not real estate investing to real estate investing can be a big leap for some. So let your dreams of financial success motivate you but don’t let the details overwhelm you. Instead, just focus on getting that one property. It might take longer than you expected and you might hit some roadblocks along the way… but that is GREAT news because it’s an education that every investor goes through and if you figure it all out on your first property then you’ll discover the second, third, fourth (etc.) properties will join your portfolio that much more easily.
Step 2. Invest For Cash Flow
This is the most powerful way to build your portfolio. Invest in real estate that brings in cash regularly (usually through rentals but there are other ways as well). Chances are, your properties will appreciate and if you choose to sell them in the future then the pop in income will be a nice bonus but it’s never something you should pin your hopes on. Instead, just focus on getting that monthly income flowing in. Believe me, get a couple of these properties pumping money into your bank account and that will change everything for you!
Step 3. Tap Into Financial Strategies
A lot of investors get their first property using their savings, home equity, or a mortgage. But there are only so many properties you can get that way before that tap runs dry. Fortunately, there are many really powerful financial strategies that will allow you to invest in more properties than you think you can. (Contact me to find out what these strategies are. I’ll also talk about them in some upcoming blog posts so be sure to check back often).
Step 4. Create A Plan
Real estate investing is a business. Not a lot of people approach it that way but the ones who make the most money discover that truth early. Because investing is a business, you should put together a plan for the future: Plot out how many properties you’ll buy, when you’ll buy them, and how you’ll get the money. Plan in advance by deciding how many properties you want to own in 5 years, then work backwards to determine how often you need to buy properties and how you’ll access the capital to get them.
Step 5. Split your money… And Enjoy Some Of It!
When you investing in cash flowing properties and you start seeing that monthly rent money coming in, here’s what you might want to do with that money (note: be sure to involve an accountant in your financial decisions) – put some of the money away in a reserve in case you need to suddenly spring for a new furnace or roof, put some of the money away into an account that you’ll use to reinvest, and then enjoy some of your money because you’ve earned it!
This simple 5-step plan won’t turn you into a billionaire by next week. So put away those plans for that gold-covered yacht for now. However, this plan is a far more sensible, realistic plan that you can use to grow rich slowly and steadily, enjoying your increasing financial success along the way.