Lessons from Vegas Baby and the 3-Step Investing Formula

by | BiggerPockets.com

As I type this I’m sitting in the Trump International hotel with a beautiful view of the strip — But in about 10 minutes from now I’ll be sitting in the sports book with an even better view of dozens of TV’s with all of the basketball games.

If you love the sport of basketball, I highly recommend you come to Vegas one year for March Madness. There’s nothing like it.

This place is a complete madhouse where everybody is going crazy.

People are drunk as can be, throwing hundreds of dollars down on the craps table and common sense has completely gone out the window.

In a nutshell, it reminds me of the housing crisis, where people went nuts and threw caution to the wind. The good thing about Vegas is that tomorrow morning people will only wake up hung over and a few hundred dollars poorer… but the real estate investors who went crazy have ended up bankrupt, losing their life’s savings and, ruining marriages and families.

I’m very thankful I’m not one of them. It’s because I’m very conservative and because I follow my 3-step formula.

Here’s what my 3-Step Real Estate Investing formula is all about:

  • Step one is wholesaling.
  • Step two is lease options and sub-2 deals that I sell on a rent to own basis
  • Step 3 is my buy and hold properties that give me cash flow.

Step one is my cash-now strategy. That way, I always have cash coming in the door. But, I don’t want to be wholesaling when I’m 80 years old so the whole purpose of step one is to give me cash to live on and to pay down my rental properties.

Step two is for larger paydays. I get a small option fee upfront but I get the $30,000 paydays on the back-end. Step two is used when I don’t want to hold a property for the next 30 years and to help me pay day my properties quicker.

Step 3 is the “holy grail” of real estate investing. In my opinion this is what we should all strive to achieve — $10,000 a month in passive income and ten or more properties owned free and clear. But to achieve step three you have to do steps 1 and 2 and pay down the mortgages on the properties over time.

Most importantly, you will be doing all three steps at the same time. Because, if you’re a conservative investor who properly evaluates all of your deals to make sure the numbers work… if you never speculate and always make your money going in… then a few years from now you can have a large passive income stream for the rest of your life.

In fact, I just worked with an investor who now has $9,000 a month of passive income. He doesn’t have a “job” and he doesn’t even do that much investing anymore. He’s content taking it easy, and thanks to his smart planning, that’s exactly what he can do.

Alright, it’s time to go watch basketball. Remember not to go “crazy” with investing and use smart and conservative planning. Save the craziness for Vegas…

Photo: Brian C.

About Author

Jason R. Hanson is the founder of National Real Estate Investor Month and the author of “How to Build a Real Estate Empire”. Jason specializes in purchasing properties “subject-to” and has purchased millions of dollars worth of property using none of his own cash or credit.

1 Comment

  1. Hi Jason,

    Hope you are enjoying Vegas!

    Out of curiosity, the investor that you just met with, earning $9,000 a month…how did he achieve that (step by step). Did he used your 3 step approach, or did he use a different method?

    Best Regards,

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