In this article I will show you some very simple ways to build 10K per month Cash Flow from Rentals. All it takes is Clarity, Comfort and Action.
Building Cash Flow from rentals is a very appealing strategy to many investors and for many reasons. First, it can replace your income and free up your time, both are major motivating factors. Here are common motivations or “Why” investors build Cash Flow from Rentals:
- Retire Early
- Supplement and Replace your Income then Quit your job
- Spend more time with family
- Live financially free
- Help your family achieve financial freedom
- Age and/or health concerns require passive income
- Focus on other appealing projects and interests
- Improve your lifestyle and do exciting fun things you have put off for years
Most investors have the desire and motivation, they usually fall into 3 category types:
- The first never pull the trigger mainly because they are not clear enough on what to do to be comfortable.
- A 2nd type buys with cash or conventional financing from big banks and builds very slow, often never achieving their monthly Cash Flow goal. They often never realize there are much better financing options and creative strategies used by highly successful investors and they are very much constrained in ability to meet their goals.
- A 3rd type is really savvy. They know what financing options and creative strategies the experts and really successful investors utilize. They look at their monthly cash flow goal and figure out exactly how many properties they need to purchase, how to finance and how much down payment to raise and they usually write this all down in a clear fashion. This 3rd type of investor can realize a great deal of success. The only difference between this 3rd and extremely successful investors is Clarity. They are clear on everything which gives them to comfort to take action.
3 Ways to Build 10K per month Cash Flow from Rentals:
- Buy with Cash – 1.2mil in cash required to achieve 10K monthly income from rentals
- Put 20% down and buy with a portfolio loan: Only 440K required as using leverage your money goes much further and your cash on cash return skyrockets
- Raise down payment money and buy with a portfolio loan
- Crowdfunding – 200K investment with crowdfunding putting up the rest of the down payment and partnering on a profit split
- Lines of Credit – you will need 900K credit line at 6.9%, you would be responsible for the out of pocket expense to obtain the credit lines which could be around only 20K.
- Equity Partner – You put up 0-10% of the down payment, they put up the rest and you negotiate a profit split.
How to find Clarity and become successful like the 3rd type of investor above?
Clarity is one of the simplest concepts that is most often overlooked. It is the critical component of productivity, overcoming procrastination, success, achieving your goals, etc. Brian Tracy is a brilliant writer that teaches the importance of clarity in his different books. In fact, there was a Harvard study that concluded that the Harvard MBA graduates that write down clear goals and clear tasks to achieve them are 10X more successful. So my challenge to you is to START NOW – write down a clear Cash Flow goal and clear steps to achieve this. With the acquired comfort it will be easy to take action and realize incredible success.
What kinds of deals make sense?
Properties that are already rented, managed and have already been renovated are best. Often called turnkey rentals, these properties do not require fix up, tenants or property managers. Vacant and distressed properties will require a lot of cash to get them fixed up, rented and managed. Markets are improving all across the country. Appreciation is speculation and we are talking about Cash Flow rentals. You have A, B and C class properties. A are usually in nicer areas, are more expensive, have lower cash flow and higher appreciation expectations. C are in blue collar areas, have higher cash flow, lower appreciation expectations. B are in the middle. It is best to diversify. If you target C properties you must do thorough due diligence to make sure they are not in warzones or there is too much risk of poor operations. Some of the best returns are in C areas but they also have the most risk so it just requires high due diligence.