If you’re reading this, you have been bit by the bug to make passive income from real estate and truly, I can’t blame you! Income from real estate is amazing and it has completely changed my life.
If there is one thing I know when it comes to income from real estate, it is that the time is always right to jump in! Don’t wait another day to start. The time is now.
How to Add Passive Income from Real Estate to Grow Your Budget
Let me tell you a story about a deal I did a few years ago. This house was a simple little deal and I got it under contract with owner financing. The contract was $6000 for the house over the course of about 3-4 years with monthly payments of $200. Now, I did not put any money down on the house, but the same principle is true no matter how much money the house costs.
So, I marketed the house as a lease option at $15,000 with monthly payments of $400 on a term of about 2-3 years. But, remember, since this was a lease option, I was going to get some money down on the house right away.
That is what is called an option fee, or another kind of income from real estate.
Well, while I had plenty of offers I could not find anyone who would give me $15,000 for the house. The neighbor, however, was willing to give me $12,000 within 2-3 years and $300 each month until they could pay off the house. While my overall profits dropped, they did not drop too horribly. Don’t want to be greedy, right?
At $12,000 I would still double my investment, and I would also make an additional $300 each month. Also, the buyer was going to give me $5000 upfront for their option fee. Now, since the deal was such a small deal, I was happy to apply all of that fee to their purchase price. This meant that they only owed me $7000 on the house.
Here’s where it gets even more fun. Once I knew that the buyer was going to give me $5000 in cash upfront, I called my seller to renegotiate. I said, “Hey, what if we were to drop this whole seller financing thing and I were to give you cash right now. How much would you sell it to me for right now?”
Guess what my seller said…
$3000! That’s right.
Cash definitely spoke to the seller and they were more than happy to be done with it for half the initial amount I was going to pay!
What did that mean for me? It meant that my take-home profit would now be over $9000 instead of the initial $6000 I originally expected. Also, I no longer had to make a monthly payment to him of $200. I now owned the house free and clear! So, that $300 every month from my tenant was now fully passive income and profit.
All in all this deal got me $9000 profit over the course of two years for putting a few bandit signs out, pushing some papers, and talking. That’s my kind of money. I did not sweat or flip the property. In fact, I never even entered the house!
A deal that took me about six weeks of time from start to finish got me a few hundred in my pocket each month and a solid return on investment within two years.
I made upfront $2000 and created a $300 a month passive income, cash flow situation. If you were able to do one house like this a month for a full year, at the end of the 12 months you would have $3600 coming in monthly as passive income from real estate deals! That’s AWESOME.
Yes, I know $300 a month on a deal does not sound like much, but even those little dinky deals can add to your budget.
And, remember I also got to keep $2000 in my pocket once I paid for the house in cash. If I get $2000 upfront cash in each month’s deal, that’s another $24,000 from option fees.
This is simple. I did not have to go set up a tupperware or jewelry party at someone’s house. My life did not have to be put on hold for nights while I worked at some job. I did not have to hold an open house or even swing a hammer to flip the house. Nothing. I did not have to do squat except check my bank account and make sure $300 came in every month.
And this is just a little bitty deal! Imagine if it was a $300,000 house and we could make $1000 a month on it. I’ve had people give me $40,000 option fees to move into my house. And that kind of option fee gives a great chance to renegotiate the initial deal with the seller, just like I showed in the previous example. This is money just passive income every single month because I know how to do simple math. Not fancy math; basic math.
Let me ask you…how much are you making a month right now?
What would you do if you were making an extra $3600 every month? Maybe you could quit your job, or be a bit closer to bringing your husband home from his job? What if you could start another business you want to do? It could fund your hobbies, or pay off a car, etc. $3600 is not a small chunk of cash and it is not too difficult to get that passive income from real estate.
If you live in California, a deal like this is probably not really available. But, in most of the south, these deals are out there where you can create a $300 a month income from real estate that is free and clear. Or if you have to get a sandwich lease option where you pay out $800 a month, but you can rent it for $1300 a month, you still make $500 a month. Think: one of those every month for a year is $6000 a month PLUS option fees!
That’s life-changing passive income from real estate! Don’t put it off.
Every week and month that you put this off is another week that you delay this change in your life. This is possible. What are you waiting for? There is nothing like the present to jump into action, join our FDDF Plus ladies, and get right the support you need to seriously make an impact in your budget and financial picture.
You can do this. Anyone CAN do this. The question is where or not you will do this. Well, will you? The choice is up to you.