I’ve build a small real estate business that does $55,200 in annual income. As I’m learning more about this business and my market I’m in the process of refinancing two of my properties thanks to the effects of COVID. This action will lower my interest rates and lower my monthly payments which will increase my net operation income (cash flow) on each property.
At my stage in this entrepreneurial journey I’m more in favor of earning more monthly cash flow (profit) than building up equity. The whole reason I got into the real estate business was to use this asset vehicle as my means of achieving financial independence at a young age (in my mid 30’s). I’ve always had this entrepreneurial bug, failing to make real money in several technology startups I put considered time and effort in. However when I discovered real estate the whole model made sense to me. I’m all in!
My plan over the next two years is to double my rental income to $110,400 which at full occupancy will cash flow each year $10,000 – $18,000. This is possible by following the house hacking renting room-by-room model.
Colorado is an expensive market and the greater Denver area allows for 5+ unrelated people to live in one property. Northern Colorado is much stricter in their occupancy laws which has forced my business to grow at a slow rate my first two years. Nevertheless I do not view this as a negative for I believe if I grew too fast I would become overwhelmed with the extra work load outside of my full time marketing career.
I believe the best way to make money in this business is by building systems that generators monthly cash flow. I’ll get a profit each month while enjoying the tax advantages (saving money), appreciation of my properties in this hot market, and depreciate savings all the maintenance I will executed over the course of the year.
Real estate is a great vehicle to build wealth while generating cash flow. It’s not a fast business to make money in which took some rewiring of my brain in the early years. I have a technology background. Everything moves so fast in tech and if you’re not a millionaire in one year in tech what are you even doing, right!?
Tech business (in time) and my career (right now) is the conduit for capital infusion into my real estate business to keep it operating and growing at a steady clip.
I believe in a few years my assets under management is going to explode. Life, in it’s mysterious ways, seems to adhere to the principles that a person needs to acquire certain levels of experience, skill, and competencies before large opportunities can manifest. I believe this natural principle exists as it relates to consciousness. A human consciousness needs to increase it’s awareness through learning and self reflection. This allows a person to consider new ideas and old ideas from a new perspective. That creates ‘idea sex’ helping a person to have breakthroughs in their personal and professional life.
I’m happy with my growth and success thus far. I am by no means a very wealthy man, but I have established a robust foundation to build upon for the rest of my life. This is why I believe your 20’s are the defining decade in your life.
A young person must put in the work early and often in life to get ahead later on. I’m not saying a person in their 40’s couldn’t “make it,” I just know it will be harder at 40 to hustle toward your professional and personal dreams than it would be at 20. As you age, life becomes more and more complex. The responsibilities pile up and before you know it there’s no time in the day to work on things YOU want to work on. All your time is dedicated toward raising a family, growing a career, self development, and taking some time to smell the flowers. That leaves very little to no time spent on building cash flowing, appreciating businesses.