What is the "easiest" way to get 3k-5k in monthly passive income?

69 Replies

@Frank Wong "I think too often people get distracted with real estate investing and try to make it their primary income. RE should be a compliment to what you do not a replacement in the beginning. Then 15yrs down the road you can decide if you want to work for the man still." Frank, this is perfectly said. I love that and couldn't agree more.

I think something anyone can do in the meantime to avoid dipping into their real estate income is to find a job or career path that they actually enjoy. Somewhere you don't hate to go to work everyday, just waiting for passive income to be your saving grace. It will make the process on the road to financial freedom so much more enjoyable. 

Just remember too, if it were easy everyone would be doing it.

@Lucas Mills Have you considered purchasing from Delinquent Tax Sales ? with 100K you can purchase a home thats double that or more, then Flip it to get your capital back to repeat. Like with every thing else these days competition at auction is steep but alot of people walk away every month with great deals. Just do your due diligence.

@Lucas Mills

DO hard money lending or P2P lending with whatever funds you can set aside to be in a truly passive position. I am starting to do that myself now and I hope it helps multiple the income streams I have already. Hard money lending can be between 8-12% return (terms vary) and potentially a point (s) which are a percentage of the loan amount paid as a premium on the loan. I am new to this area so I am still learning about it but from the people I have spoken to so far, amounts a little as $20K would be enough to get rolling. Securing the money would vary depending on what kind of deal it is but again I am new to this area. I have heard if you provide enough money on loan, your name would be on deed to back the loan. If you provided a portion of loan you could be in a 1st or 2nd position on property mortgage.  I am sure there are tons of people who can correct my above statement. 

Originally posted by @Chris Armstrong :

@Lucas Mills

DO hard money lending or P2P lending with whatever funds you can set aside to be in a truly passive position. I am starting to do that myself now and I hope it helps multiple the income streams I have already. Hard money lending can be between 8-12% return (terms vary) and potentially a point (s) which are a percentage of the loan amount paid as a premium on the loan. I am new to this area so I am still learning about it but from the people I have spoken to so far, amounts a little as $20K would be enough to get rolling. Securing the money would vary depending on what kind of deal it is but again I am new to this area. I have heard if you provide enough money on loan, your name would be on deed to back the loan. If you provided a portion of loan you could be in a 1st or 2nd position on property mortgage.  I am sure there are tons of people who can correct my above statement. 

chris not exactly right.. what your talking about is a fractionalize TIC beneficial interest in the note say you have 100k note with 5 20k investors they each own 1/5th of the note and all are in first position.. some states this requires a securities license or offering.. some states its fine.. or like CA you need a real estate or mortgage broker ( licensed to do the paper work..) its not first or second position.

Originally posted by @Chris Armstrong :

@Jay Hinrichs Any recommendation for where to buy notes? Or if there are any "note brokers" who read this would you please PM me. INterested for sure.

just google Hard money lenders SC NC the local guys will pop up and most of them take in investors..  

Passions aren’t “found,” they argue. They’re developed.

https://www.theatlantic.com/science/archive/2018/07/find-your-passion-is-terrible-advice/564932/

Trying to lump your passion into a business has been touted as the path to progress but it does not make sense.

You are looking for a method or way you can do that is duplicatable, sustainable and profitable. Once you make money you can find something else to be passionate about.

Real Estate is usually a means to an end, like you mentioned.

So my 2 cents if you want to make money in RE find one type and become that expert and market as such.

You already did a hard job of the deal you put together, yeah it was not the best experience but usually we make bad decisions when we base them on not having enough money to do the deal. Shake it off and readjust. There are 100 ways to do deals. Its tough but be persistent - I've had to change my business model a dozen times and failed 50% of the time - big time. The key is to keep at it. Its easy to not do something.

Take stock of where you are. You have a job that you can do anywhere, can you reduce your living expenses and save up more capital. Move to a market that is growing. 

You do not like the BRRRR method but out of all the real estate methods out there its a strategy that uses leverage and upside to grow your returns. There is no magic number in RE you can buy a duplex or a 20 unit for almost the same dollar per sq ft, you get better efficiencies but not much. Cash flow in appreciating markets is going to be low, but the hope is to gain equity. I had a client call me the other day and say I just got $x amount and want to buy something, it was alot of cash but it was not enough to magically make the numbers work any better.

Maybe partner up with someone that can do a flip, go in with them and they do the grunt work. If you came to me yesterday I needed a partner to do a flip on a condo. 

You can also look at doing a 2 year flip, buy, fix and live in property and sell after two years and you get that equity tax free if its your owner occupied house [assuming the market is going to continue and location makes a big difference]. But look in the hot growing markets and buy there and do that. Look at 2-4 units with FHA financing.

Investing passively gets you passive returns. Over time its a great method but to build equity you need forced appreciation and leverage.

Keep us posted because we all are looking for that one thing that works.

My husband and I put down large down payments on Class A single family homes in an area that petroleum engineers are on a 2 year transfer cycle and don't want to buy. This is our low fuss/high cash flow strategy, we have high rents and generally very good renters. We use 30 year mortgages, but snowball the payoffs. We don't use any of the rental income for personal expenses at this time. Our current retirement plan is 18 years away because there are a lot of benefits that come from being retirement eligible from my husbands job so we are doing this in the background of our regular income in the meantime. This could of course change between now and then! 

Hi Lucas

You have great investors before be giving awesome ideas. My two cents would be, you have a clear goal and you know exactly what you do not want to do. If I was you, I will go to every Meetups in your town and look for a partner. To me partner is someone who complements my deficiency or loves to do what I don't. That way you can do what your parner dont like and partner or partners can do what you don't like to do. This will help in continued progress towards the ultimate goal.

If want lower risk then a pure BRRR find deals that need just a light cosmetic rehab and don't refinance after. Adds a nice boost to over your local markets average return and doesn't have the risk of lots of debt, potential issues on bigger rehabs, etc. I have lots of clients who do this recipe for 2-4 units here in Chicago often owner occupant easy first deals.

As for single family houses lots of people on here praise them but when I run the analysis on these out of state cheap single families maybe I am too conservative with expenses but they don't cashflow enough to be worth my time.

Everyone is giving awesome advice here. Passive income is so highly desired and can eventually be achieved. It does take time to build up a solid amount of rentals and acquiring a property manager to fully achieve a passive result. This is my end goal as well, I have one rental property and is my second job. I am looking to invest and applying the Brrrr method to achieve this.

I'd also look into Tellus, the rental management software I use, they just notified me that they are expanding with investing and providing loan options. This actually lit a fire under me to start exploring my investment options if I want to be truly successful in the real estate world. Good luck to achieving that 3-5k passive income, it is definitely doable!

@Frank Wong which markets do you deem worthy of further study that have $100k-$150k rentals in solid B class neighborhoods? Would those typically be the average home prices in those markets? Thanks!