Real Estate Business Systems

Real Estate Investing takes a lot of work, but it is the best source of passive income.

That sentence does not make any sense, does it? How can something be passive and take a lot of work to do? The answer is that it starts out as a lot of work, but with the proper systems in place it becomes passive (at least for the person who sets up the system).

I do not yet have our business system set up, and the details of its final form have yet to be worked out, (and will change a dozen times before reaching the end), but I know what my goals for it are. It needs to be able to run with very little input from me or my husband. The hard work comes in setting up those systems.

Once the property has been bought and all of the needed repairs and management put into place, I want very little to do with each property every day. I am not saying that I expect never to do anything for it ever again. The management company will send reports about the property, and I will need to make decisions in the future about any repairs that need to be made. But this should not take more than a few hours a month, if even that.

I do not want to have employees or even an office outside of my home that I need to go to everyday. I want to have client relationships with people and businesses. They will do whatever portion of the real estate process that they specialize in and just charge a fee. I do not ever want to deal with payroll or health insurance that is not my families.

I am not a lazy person. I was raised with good work ethics, but I want my time to be free for other investments. If I am too busy managing the details of properties than how am I supposed to have to time purchase and run hundreds more.

There is another side to this picture also. I hear so many people say that they bought real estate with “private investor money”. Those private investors are making passive income. They have money to invest and it is being invested in real estate. Other people are finding the deals for them and using their money to buy it. I am sure that some of those deals are not only set up based on a quick ROI%, but based on long-term equity in the property.

I am constantly amazed at how many ways there are to make money in real estate.

To Become Wealthy: Other Ways to Make Money

I do not plan on relying on only one source of income to support me in the present day of in the future. Currently I have only one source of income from my 9-5 job as an employee. If I lose this job through my own fault or no fault of my own, I will have nothing but unemployment checks to keep me fed and housed. I am fortunate enough to be part of a two earner household so I could survive a little longer with no income than I could if I were single. However, if both of us were to lose our jobs at the same time, we would have approximately 3 months before we would have to sell our home. It would take less than 1 year before we would be basically bankrupt.

I do not hold a high opinion of my current situation. But, I put myself here, so it is my responsibility to get out of it. Hence my interest in real estate investing. But there is more to life than that. There are a lot of people out there making money with blogs. I want to be one of those people. I read about one man who used his blog to help show off his talents in order to land a better paying 9-5 job. I guess it was sort of a supplement to a resume. There are others who use their blogs as a medium in order to sell products like books to other instructions materials. This may be a method that I will also pursue in the future.

The current method of income that I am using on the blog is Google Adsense. It was very simple to set up. My husband did it for me in about 5 minutes. Today, I am proud to announce, I have made my first $0.35. Yes, you read that correctly, 35 cents. I would like to send out a special thank you to whoever it was that clicked. Thank you and feel free to click anytime that you want!!!

To Become Wealthy: The Master Plan

Ultimately the question is ,”How do I want to live my life?” I never aspired to be a real estate investor. I have no training or formal education in this area. I am enjoying what I am doing so far, but it is far from what I would call one of my passions. However, I am passionate about making large bank deposits.

I am investing in real estate as a mean to an end. That end is financial freedom. To be able to do what I choose with my time. To not have to make a contract with someone for 40 hours a week of my time for only $40,000/ year. I want my time to be my own and my families. Time is the ultimate currency for me.

My husband has different reasons. His passions is to start a company of is own. He is a web designer and a graphic designer. He has some innovative ideas on how to run a business in this field. He plans on starting his own blog about it some day soon. So for him the money w make from real estate investing will free him up to pursue his passion and make a real go at his own business. Of course if it also frees up my time, I will be able to be by his side to help him along the way however I can.

We have done a lot of taking and planning for the next few years of our lives together. We have already survived the wedding and the first home buying. Now we are trying to figure out who should leave the rat race first. We have discovered that it takes a decent amount of time to look thru properties and prepare to purchase them. So we decided that if I stay home from work that I would do most of the work to manage the real estate investments and expand our portfolio.

I make less than he does, so in one way it makes sense for me to leave my job first. We are also planning on starting a family next year and the mother is traditionally the one that stays home with the children. This is something that I look forward to being able to do. Even though both of the grandparents are hoping to be able to take care of any babies during the work week, I would rather have that responsibility myself. My plan is to have any potential baby sitters come over during the day to give me the freedom to attempt to have uninterrupted time to manage our investments. Those of you out there that are already parents may be laughing at this plan, but I think I am allowed to dream.

The other option is for my husband to leave his job first to pursue his own design business. If he can do this free from most financial stresses his can take more risks, try more things, and do what he needs to do to take this business from just a start-up to a self supporting entity. All while I have the rat race job and the health insurance.

Health insurance. This is the real issue that keeps me in the rat race. I am too dependant on other people paying for it. I did a quick search for rates for small businesses. We are planning on holding our properties in an LLC that we would purchase the policies under. It would be approx $8-10,000/year for the two of us, more if we have any children. Of course we can just calculate this into our numbers and be done with it, but some mental block I have makes me worry about it. For me it is the largest issue that we face when deciding when to give up our day jobs.

Oh how I dream about giving up my day job……

To Become Wealthy: More on Passive Income

My husband is a very patient man. I am not. It is sometimes painful for me to sit patiently and wait. So I am expecting that the steps it takes to build passive income to come difficulty to me. I want to be wealthy now; I want to quit my day job now. And there are plenty of people out there who promise instant wealth. I do not believe them. I can not see how I am attend one seminar or buy a few products and suddenly be wealthy. I am very skeptical of those promises.

My husband and I live a comfortable life. We both have decent jobs. (His is much more decent that mine.) We bought our first home a year ago, right before we got married. It is a wonderful house with plenty of room for our future family. I am in love with this house and think about all the things I would rather be doing there while I am stuck at work all week long.
We are also fortunate that our only debt is the house. We have no outstanding car, school or credit card debt. And we are able to save some money each month. But now I realize that simply saving money will never make me wealthy. Sure, we invest in the stock market, but what do we know about stocks? Our day jobs have nothing to do with the stock market. I own some index funds in an IRA and he owns shares of Google. Both are pretty safe investments. They may pay out well one day and help us retire, but they will not make us wealthy.

Both of us work for our money, but we are going to switch things around and have our money work for us. It sounds easy, but it is taking more work and time than I expected. I have discovered that even passive income takes a lot of work to set up. But I would rather work hard now to rest later, than have to work with no end in sight.

To Become Wealthy: Passive Income is Real

I want to make passive income because I am stuck in a rat race. Only 2 days out of each week belong entirely to me. The other 5 belong to my employer. During those weekdays, only 4.5 hours each day belong to me and my family. (Not including sleeping.) The rest are spent at work or commuting to work. (I have a long commute, 1.5 hrs door to door each way.)

My husband was the one who introduced me to the idea of passive income, and the idea of not having a 9-5 job until I turn 65. I am NOT one of those people who love my job, but I am a slave to that weekly paycheck, so I continue to work for other people. Fortunately I no longer see this as the only option for my life. Eventually I am going to create several different sources of income. I am expecting real estate investments to be the most lucrative, so I am putting most of my time and effort there. There will be lots of work involved to set up each source, but then they will run themselves with a little work as they still continue to produce the same levels on income. (One source of income might even be this blog.)

There are so many people out there with ideas on how to change your life. Some of them will help you organize your life so that you are mentally prepared for what you need to do. Others take it even further and will tell you how they became wealthy and how you can do it. All you need to do is open your eyes and look. Let me know what you find.