Ick, I'm sick
Well what the hell. Just Sunday I think it was 90 degrees and humid. Yesterday before I went to bed the temp was down to 43 degrees. I don't get it, but that is Nebraska for you. I think the abrupt change of weather has made me sick. I've got a runny nose and cough. Mostly its the runny nose causing the cough, but whatever. I went and worked on my rental house today regardless. Hauled the fridge and stove out, the tenant had their own. I also am nearly finished with the siding project, and I should be completely done with one more day's work on the place.
It will be nice to get all done and put the tools away. My next project is probably going to be overhauling my new office at work. I want to re drywall everything and put in recessed lighting, paint, crown mouldings and then wood floors, but I don't think I can afford it ATM, so it will have to wait until I crank out some work and start making some money.
The power of passive income. Wow, I love this stuff. The thought of working for money pretty much makes me vomit any more. Well not really but I get excited building things and watching them grow. The more passive income I make, the more I want. I'm only going to work, in order to further my passive income. In other words, I will work to pay the bills and make more money to re-invest into real estate. When you think about it, I worked for roughly 2 months full time on this last rental house. I make about 250 a month after PITI. Over the next 10 years it will generate 30k. Minus my down payment & repair costs I put into it, that leaves about 24k of profit. That means I basically made 12k a month for my two months work. Not bad at all. Impressive TBH. Then in 10 years the place is paid for, and my profits will rise to 350 a month and over the next 10 years it will make 42k. Thats if I don't raise the rent, and if there are no repair costs. Of course there will be some, but overall I think the potential here is insane. I didn't mention the tenant building me equity, since their money pays back the bank.
So if I keep the place 20 years, I estimate the property to be worth 30k today, and with a 1% annual increase in value it will be worth 36.5k in 20 years. So if I keep it 20 years and sell it, I will make 24k + 42k +36k if all my math checks out, which is 102k total revenue earned. Thats amazing for 2 months work and 6k invested. Working 2 months at a job will pay you about 8-16k depending on how much you make for a living.
Then when you consider that this extra cash flow allows you to make more investments faster, or bigger better investments the snow ball effect kicks in and that is how millionaires are made. I mean if 6k can make me 250 a month cash flow, it stands to reason that 60k can produce 2500 a month. The more cash flow you have, the bigger and better investments you can make. So really I have no clue how big and great things can get down the road yet, but I can only imagine.
Long story short is I love real estate. It seems like the best way to become rich. Its a for sure thing, provided you work within certain parameters. I think most people would crumble though, fixing up a trashed house. Its a lot of work, and it can get old after a while, and if you can't keep going despite all things, then you could end up spending a lot of money or losing many months rent because you can't finish it. The other way is to buy places ready to go but you'll pay a premium for them, and won't cash flow. Or if one thing goes wrong your in financial trouble. Or if you lose your tenant, the payments would bury you. Thats why you buy dumps for nearly nothing and bust ass on them. This way you have instant equity when its done, and you get the deals noone else sees.
It would be nice being one of those guys you see on tv who don't get dirty, they just hire contractors and sit back and watch the progress, but TBH I can't see making any money that way. Its too risky and I don't really have the banking power to do it that way. I like fixing these places up. Its like they are your little kids you built from the ground up. Your little soldiers working for you after you trained them and made them sweet. I like to look at it like a game where its Monopoly but everyone can win. I've got my first little baltic avenue up and running and I love it.
It will be nice to get all done and put the tools away. My next project is probably going to be overhauling my new office at work. I want to re drywall everything and put in recessed lighting, paint, crown mouldings and then wood floors, but I don't think I can afford it ATM, so it will have to wait until I crank out some work and start making some money.
The power of passive income. Wow, I love this stuff. The thought of working for money pretty much makes me vomit any more. Well not really but I get excited building things and watching them grow. The more passive income I make, the more I want. I'm only going to work, in order to further my passive income. In other words, I will work to pay the bills and make more money to re-invest into real estate. When you think about it, I worked for roughly 2 months full time on this last rental house. I make about 250 a month after PITI. Over the next 10 years it will generate 30k. Minus my down payment & repair costs I put into it, that leaves about 24k of profit. That means I basically made 12k a month for my two months work. Not bad at all. Impressive TBH. Then in 10 years the place is paid for, and my profits will rise to 350 a month and over the next 10 years it will make 42k. Thats if I don't raise the rent, and if there are no repair costs. Of course there will be some, but overall I think the potential here is insane. I didn't mention the tenant building me equity, since their money pays back the bank.
So if I keep the place 20 years, I estimate the property to be worth 30k today, and with a 1% annual increase in value it will be worth 36.5k in 20 years. So if I keep it 20 years and sell it, I will make 24k + 42k +36k if all my math checks out, which is 102k total revenue earned. Thats amazing for 2 months work and 6k invested. Working 2 months at a job will pay you about 8-16k depending on how much you make for a living.
Then when you consider that this extra cash flow allows you to make more investments faster, or bigger better investments the snow ball effect kicks in and that is how millionaires are made. I mean if 6k can make me 250 a month cash flow, it stands to reason that 60k can produce 2500 a month. The more cash flow you have, the bigger and better investments you can make. So really I have no clue how big and great things can get down the road yet, but I can only imagine.
Long story short is I love real estate. It seems like the best way to become rich. Its a for sure thing, provided you work within certain parameters. I think most people would crumble though, fixing up a trashed house. Its a lot of work, and it can get old after a while, and if you can't keep going despite all things, then you could end up spending a lot of money or losing many months rent because you can't finish it. The other way is to buy places ready to go but you'll pay a premium for them, and won't cash flow. Or if one thing goes wrong your in financial trouble. Or if you lose your tenant, the payments would bury you. Thats why you buy dumps for nearly nothing and bust ass on them. This way you have instant equity when its done, and you get the deals noone else sees.
It would be nice being one of those guys you see on tv who don't get dirty, they just hire contractors and sit back and watch the progress, but TBH I can't see making any money that way. Its too risky and I don't really have the banking power to do it that way. I like fixing these places up. Its like they are your little kids you built from the ground up. Your little soldiers working for you after you trained them and made them sweet. I like to look at it like a game where its Monopoly but everyone can win. I've got my first little baltic avenue up and running and I love it.
posted by Joel Huenink at
2:35 AM
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