People across the internet are always coming up with little cute sayings that sound good. One of the latest ones is “the average millionaire has 7 income streams.” Let’s say that it’s true… I’m quite sure these people mastered one stream, then went on to the next. Unfortunately, that is not explained. I see many people launch their real estate business, multi-level marketing company, and landscaping company, all while working a 40-hour-a-week JOB. They do this all within four months. So normally by month six, they are not doing anything but working. The reason being that there is no escalator to success; you have to take the stairs.
In my younger 20s, as I talked about on BP Podcast episode 116, I was stupid because I assumed success was easy as 123, ABC, etc. And that thinking caused my partner and I to lose $7k a piece. So please allow my education to save you money. I’m writing this to let you know that you don’t have to look outside of real estate to create multiple streams of income. You can have multiple streams within the real estate industry. Even in the book Multiple Streams of Income by Robert Allen, he talks about how having multiple rentals is considered having multiple income streams. Because if you have 7 rentals, it’s highly unlikely all 7 will be vacant at once.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
This is the dream right? Going from zero to 10+ rental properties, providing stable cash flow and long-term wealth for you and your family, and building a scalable business model to boot! Learn how this investor did just that, in this exclusive story featured on BiggerPockets!
How I Created Multiple Income Streams
Now, in order to achieve multiple streams, you do not necessarily have to follow my order. However, I will tell you how I did it. I started out wholesaling. And the benefit of starting out wholesaling is that you will learn how to find a good deal. And as long as you can find good deals, you will always be in business. The follow up system you create will do wonders for your business. I spoke with a seller back in April, and I am now working with her to contract her property. With wholesaling your average fees will probably range depending on your market. I lived off a wholesaler salary for about two years before entering rehabbing. So yes, you can just wholesale and live a good life. Just remember, it is a job that requires a LOT of work.
I eventually got good at wholesaling, closing deals every month, and that led me to build relationships with cash buyers. I presented the idea to them that if I were to find the right deal, could we partner up and split profits. They gave me preliminary yes. I came across a home run, and as a wholesaler, you come across these deals probably once or twice a quarter. I presented the deal to four people, and one person said, “Let’s do it.” I ended up getting into the game. That was the beginning for me getting lenders, gaining experience, and getting a “fat check.” Now, notice how I worked hard at one thing, got really good at it, and that one thing led to the next thing.
Putting Money Back Into Real Estate
Once you start getting big, fat checks that are normally the average person’s salary for the year, you will then need to park that money. I use my rehab money to buy rentals. This is easier said than done. It will be very hard for you to part ways with that money. You just have to remember your end goal. I never planned on working for the rest of my life. So therefore I don’t mind picking up rentals that at first will bring me $300-400 a month. I know once I get those paid off, eventually I don’t have to work as hard as most. I asked my mentor, “Should I get my real estate license?” He asked me, “Why do you want it?” I told him because some real estate agents make six figures. He responded with, “You can make six figures as a landlord. And you need to have passive income that you receive, whether you decide to get out of bed or not.” I thought about it and realized that he was right. He is now working on making six figures a month in his particular landlord niche.
In conclusion, I write this because so many people think they have to take on 7 different industries to make multiple streams of income a year. That is not true; you can do it within real estate and mismatch niches. I do it with wholesaling, rehabbing, and landlording. You can do it with being a real estate agent, wholesaling, lending, and so on and so forth. That way, it’s all surrounding real estate, a subject we understand. I can tell you many of stories about the little businesses I did not understand that I entered on the advice of others–and lost. This was back in my early 20s, when bad advice was usually the advice I pursued. So in a nutshell: FOCUS (follow one course until successful)!
Have you created (or are you working to create) multiple income streams within real estate? How did you do it?
Let me know with a comment!