So the big question is this, what would you do if money didn’t matter? So you had millions in your bank account, what would you focus on? Would you spend more time with your family, with your wife, with your kids? Take family vacations. Would you pursue your gifts and talents in dreams?
Serve your local community, teach others, serve your church. Can you see if what you would do if money didn’t matter, it was pursue your gifts and talents and drains to serve others, and that is probably what you should be doing. The problem is most people are in the rat race, living five inches in front of their face with no time to pursue what they were born to do.
That is the problem, and the solution is to develop enough passive income to replace your working income so you can quit your job and be free to live your life the way you were created to. That is a solution and this podcast will show you how…
Hey, what’s going on everybody. This is Ryan Anc with another awesome episode of Cash Flow Dad Life. And in this episode I’m going to be sharing. I’m going to save you guys a ton of time and maybe some heartache and some energy and save you a ton of money and I’m going to be showing you the top four real estate strategies to avoid if your goal is to have passive income.
So about five years ago we were going, I think we’re moving into a new house and I’m at the time we only had four kids were working on that fifth one and I remember the house was next to a little pond and we had seen an alligator in the pond and so I was getting the kids hyped up out is like a little baby alligator. And so I was messing around with them.
I knew that, you know, little baby alligator would do anything to him, but I thought it was kind of funny…
We arrived at the house and I’m like, what do you know? All right, well where’s this alley? I was like, well, we got to find them. So I was like, all right, all four of you go start running in that direction around the pond run. Do a perimeter around the entire pond. Just to make sure there’s no alligators out there.
And so all four of them start bolting and running right away. They just, they just followed my orders right away, didn’t even think twice about it and started running it except the second one, the second oldest stops and he’s, he was the only one to stop. And he goes, wait a minute, why us?
Why are we the first one’s going to go check out to see if there’s an alligator, this life threatening animal, you know, around the pond? And that’s what a lot of people are like with real estate.
You’re like, alright, um, you know, there’s, there’s passive income out there and real estate. And uh, I know that there is some strategies out there. And then someone comes along and they’re like, all right, you’re great. You’re, you’re interested in real estate, great.
Go run in this direction.
And most people just start running without even thinking twice, like, wait a minute, why am I doing that strategy when there are other strategies out there that are way better than that, that create passive income. Okay? So here, here are the main things.
Okay, here are the main things that people get started with…
Number one, a, when people get started with real estate or they they want to start making passive income, they say, all right, well why don’t I just become a realtor? It is actually what I did when I was teaching before the hurricane hit, I was like, I need some more money, some sort of way.
I know that real estate is a great channel for it. I guess you know, it was the only thing I knew of. I was like, ah, I’ll just become a realtor. Now. There’s nothing wrong with becoming a realtor. I don’t want you guys to get the Misimpression, but what I’m saying is if your goal is to invest in real estate and have passive income, that’s not what becoming a realtor is.
When you become a realtor, you are a commission based sales rep. basically you’re connecting a, you can call it a broker. You’re connecting people who want houses with people who are selling houses.
You aren’t owning any houses. You’re not getting rental income on those houses or any other source of income on those houses.
You’re merely selling everybody else’s property for them…
Okay. And that of course is not passive income. What I discovered when I first became a realtor is that I had to sit behind the desk a lot.
I paid over $1,500 worth of mls dues and licensing fees and, and you know, these, the board fees over here and brokerage fees. And then I had to sit behind the desk and take phone calls. I had to go out to properties.
I had to drive people around all day long. And uh, and sometimes in fact, most times they would never buy from me or maybe they find a better deal somewhere else and go with another realtor.
I think they say 87 percent of people who get started as realtors quit within the first year. Now I stuck with it for five years. I enjoyed having my license and I did make a few sales that made it worth it for me. And I, I learned, you know, about contracts and negotiations by being part of all these deals, but you don’t need to become a real leader in order to get that experience as my point.
You don’t need to be a realtor to have access to the mls, even like a lot of the stuff that are benefits to becoming a realtor, you can learn that with less time wasted, less money spent, um, and you can have all the same resources.
So that would be the number one thing to avoid if you want to make passive income and real estate right now, the second thing, and you guys are going to see a ton of gurus out there promoting this, um, it’s called wholesaling.
It’s basically a way to get involved in real estate where you go out and you find deals. So you’re looking at all these different sources and you find deals and you get them under contract, but you don’t have to have a good credit. You don’t have to use your own money, you don’t have to have a real estate license.
It’s actually, it’s a brilliant strategy. But basically in a nutshell, you wrap up a property under contract and then you go and give it to a rich person, right? You give it to a cash buyer. You basically go say, Hey, Mr Rich person, uh, I know that you buy houses with cash and I’ve got this one that’s under contract, that’s a great deal.
And you work out some sort of second contract that is for a higher price and the contract that you have it. So wholesaling is basically a way to get a property under contract. You never owned the property, you don’t have any risks, and then you sell it to a person that has cash and it’s, you know, it’s actually a really cool strategy because you can make 5,000 to 60,000.
I’ve even seen on some people just never owning property, just getting things under contract and then selling it to someone else…
So what’s the problem with this? There’s no problem with this as just a cool strategy. In fact, I think everybody should learn how to do this if they’re going to get involved with real estate investing. The problem is it’s not passive at all. It’s an entirely new job, uh, to go out there and you’re constantly bird dog and you’re constantly looking for deals. You’re constantly negotiating with people.
The problem is once you get a good deal, you don’t keep it for yourself. You give it to somebody else who’s rich, right? And this is a perfect example of, you know, the guy pointing to his kids saying, hey, go check out that alligator over there.
So the people that really benefit from this wholesaling strategy, the people that ultimately benefit are the cash buyers because you have other people out there doing work for you and finding deals.
So if you’re a goal again, is to get involved in real estate because you want time freedom. That’s not what wholesaling will provide you with. It will not give you a ton of time freedom. You will constantly have to find deals. Now, look that there are systems out there and we’ll talk about them on this show.
In fact, I’m going to have somebody come on my shows and expert wholesalers and he’s got automated systems that he could set up for marketing and that’s great, you know, for our work week type stuff that basically these deals come to you and you can do it on a laptop and computer, but it is never going to be entirely passive.
You are always going to have a degree of work that you need to put into it. And if your goal isn’t to keep some of the houses on your own and, and develop your own wealth and your own assets, then it’s probably not a strategy to, uh, to waste your time with, if that’s the only thing that you’re going to do.
Okay. It says this is something that’s good as part of a larger strategy, but by itself, I don’t recommend it. Okay. All right. The third thing, and again, the third thing is similar to wholesaling, except it’s actually owning the houses. That’s the flip houses. I’m sure you’ve seen those, those TV shows flip or flop.
You know, I love that show. A different shows on hgtv where they’re flipping houses. And they’re making 30 grand, they’re making 80 grand, they’re making 120 grand. It’s actually really appealing, really attractive to look at those shows and to say, all right, I’m going to get involved in real estate. I’m going to flip houses.
Okay? The problem yet again is if your entire goal is to have passive income and have time freedom, that’s not what flipping houses is. Okay? You’re going out and you’re finding the deals. Then you’re spending time managing the renovation.
I don’t care if you’ve got the best GC in the world, you still have to spend time managing the renovation and making sure that everything goes well. Picking out colors. And then sometimes you know, you see these shows where they’re flipping it 30 slash 60 days and moving walls. That’s not most people’s experience with flipping houses.
I mean I talked to countless people who are spending six months flipping a house, two years flipping a house…
So you have all your money tied up in a property in and you’re just waiting to sell it for that quick, that quick nickel. Okay? So flipping houses isn’t necessarily a great real estate strategy for passive income. Oh, not to mention, once you sell the house, you’re not making any income on it, you’re not making any recurring revenue. And that is not necessarily a, well, it isn’t at all.
It’s not passive income and it’s not a way to generate long-term wealth unless you get really, really good at it. Um, but even if you’re really, really good at it, you still have another job. If you’re good at it, you basically have another job as flipping, you know, like as a house flipper. Okay? All right.
So the fourth real estate strategy to avoid if you want passive income, and this is probably going to surprise you guys if your goal is to have passive income, then the fourth thing to avoid is to become a landlord.
All right, now the smart thing to do is to become a landlord with a property manager. And this is something that I do as well with some of the, um, the small apartments I have. And I’m going to have people on this podcast and I’ve interviewed people on this podcast, are in small apartments.
What you’re going to discover is that it is not entirely passive. It is very passive, but it’s not entirely passive. You’re going to have to, even if you have a property manager, you got to make sure that you’re watching that property manager and making sure that nothing gets stolen. You’re going to have to pay for repairs on the, on the properties.
It is an awesome strategy. It is one of the best wealth creating strategies. And it is way better than becoming a reloader, becoming a wholesaler or flipping houses. It’s an, it is an awesome strategy to become a landlord. But there is a way to do it that is more passive.
Okay? So if your, if your goal is to have the most passive types type of income than the best strategy is to basically become the bank. When you get a property, uh, you don’t wholesale it, you don’t flip it, and you don’t become a landlord.
You basically become the bank. Think about this. Wells Fargo, they’re not. If you have a problem with your ac or if you have a problem with your roof or if you have a problem with your plumbing, they’re not taking calls from you and saying, uh, and with you saying, hey, wells fargo, can you come out here and fix my roof? Can you come out here and fix the leaking pipe?
No, you don’t say that to them because they’re the bank and they basically will say to you, well, that’s your responsibility. You’re supposed to have insurance and you’re supposed to have some money logged away for it. And if you don’t pay me, by the way, then I’m going to have to take this property back at 100 percent of the value, even though I gave it to you.
I only gave you a loan for 80 percent of the loan to value…
Right? In doing that, wells Fargo makes it incredibly passive. So that guys is the best strategy in real estate. If your goal is to have passive income, is basically get the deal, find the deal, and then become the bank to other people. That’s something that is completely doable. That’s the number one strategy in real estate, the ones to avoid.
If your goal is to have passive income is to one, become a realtor to become a wholesaler. Three to flip houses or four, become an involved active landlord. Okay, so avoid those four things.
Guys, I hope you found this valuable and I really hope you take my advice on that because if you want time freedom to pursue your dreams and your passions, this is going to save you a lot of wasted time by not pursuing those strategies in and of themselves. All right guys, take care.
Thanks for listening. Please remember to rate and subscribe. You’re going to want to listen to every episode as soon as it comes out, so it hasn’t been an idea or a strategy that can literally change your life.
Listen, don’t miss out on the free investor pools that I have on my website https://cashflowdadlife.com/. So go to https://cashflowdadlife.com/ gets a free swag and lists and hit me up. If you want to talk about how we can get you out of the rat race as soon as possible. Until next time. My name is Ryan Enk and this was Cash Flow Dad Life.