Why invest in Real Estate anyways? Why not just leave money in a safe savings account accruing a consistent (but, TINY) return? How about playing the stock market? Or giving it to Fidelity to let them do their thing?
Well, to completely understand the "why real estate?" question, we have to start from the beginning. Let's start with The Journey.
1. It all started in 2016, when I made a concentrated effort to invest in myself. I was stuck in the routine of waking up, heading to work, coming home, eating dinner, falling asleep, repeat, repeat, repeat. While I was getting great short-term work experience in my industry, I wanted to better myself, grow, and gain overall knowledge in areas such as business, finance, and long-term investing. Because knowledge is power.
What jump started everything? PODCASTS and BOOKS. Listening to podcasts at the gym instead of music became my norm. Reading books every night before sleep was part of my new routine.
My Favorite Business Podcasts
-Entrepreneurs on Fire
-How I Built This
-Listen Money Matters
-The GaryVee Audio Experience
2. I started REALLY thinking long-term. Where did I want to see myself in 10 year? 20 years? 30 years? What's my ideal lifestyle? And the answers were really simple...I wanted (and still want):
a. Unlimited time with family and friends.
b. The freedom to travel the world whenever.
c. Flexible work schedule/not being tied down to a full-time job.
d. To not wake up to an alarm clock every morning (how awesome would that be?!?!?)
3. How would I achieve those three long-term goals? It came down to finance and investing. I needed to:
a. Increase monthly income: in addition to my W-2 salary, I began working for Instacart as a side hustle. A couple times a week (after work and on weekends), I was a personal shopper and delivered groceries. I also made a conscious effort to purge my old junk/clothes and sell them on Craigslist. $20 here and $15 there add up and helped me acquire My First Property.
b. Reduce monthly expenses: for most of us, rent/mortgage is our biggest expense of the month. I was paying $1,300 a month in rent and needed to get that number down ASAP. SO, when my lease ended, I moved to a new apartment with 3 roommates for $800 a month. That's an additional $500 per month in my pocket! What else did I do? Common sense things...like brought lunch to work everyday instead of eating out. Also, bought a moped, which gets 90 miles per gallon, and limited my car driving. I could go a full month on one gallon of gas!
c. Diversify income streams: I had to find multiple ways to bring in income so I wasn't relying solely on my full-time 9-5 job. This was partially addressed with my Instacart side-hustle, but I needed to do more. So I started a travel website and produced content, which brings in revenue.
Take a look at yourself, and see where you can provide true VALUE to the world. Do people always ask you specific questions around certain topics? If they do, there's the foundation of your next business model.
d. Bring in reoccurring income while not having to work full-time: well, this was ambitious and the ultimate goal. And I'll admit, I was struggling to address it.
4. While I began to focus more on personal finance and long-term goals, I was frustrated every month. I'd get my pay check on the 1st, but watch half of it disappear straight to my landlord. However, through that frustration appeared the greatest gift. I saw the opportunity of real estate. My landlord was sitting back, relaxing, and collecting monthly checks, so why couldn't that be me? *BOOM* there was my answer to bringing in reoccurring income. I had to become a landlord.
5. One big problem: every property in my area (San Francisco) was well over $500,000. I didn't have that kind of money!! But, did that stop me? I had to get creative and think outside of the box. Three words: Always Keep Learning.
6. Jumping head-first in to Real Estate, I started soaking up real estate podcasts, blogs, books, and anything I could get my hands on. Through my educational journey, I learned that buying out-of-state, where properties were more affordable, was a realistic possibility.
7. I guess the rest is history. I jumped in, found a property in Indiana, renovated it, got it rented, and now collect monthly rental income. Read My First Property for an in-depth journal of buying, renovating, and renting my first out-of-state property, or continue to Part II below:
What's been your "Journey" into the world of Real Estate investing? We'd love to hear your story in the comments section below!