Three Step Formula For Property Investing by thepropertygroup


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									Today I want to share with you a really easy to follow, three step formula for property investing.

Step one is something we've all heard of- buy low sell high. Easy enough formula, but it's
important to realise that if we don't have any deals going on, we don't have any money coming
in. Now, we refer to that as "chasing money". There's nothing wrong with that, because with
property investing, there's a lot of zeros involved. But you've got to realise, if you don't have a lot
of deals coming in, you don't have a lot of money coming in. That leads us to step two.

Step two is what I call the seventy five/twenty five formula. Do three houses just like I said,
buy/flip, and on the fourth house, keep as rental property. I'm generalising here, of course.

Stacking Up the Numbers
The numbers have to work and it needs to be a property that you want as a rental. But of
course, you're targeting what kind of properties you're buying, so that's not going to be too much
of a problem. Now, in this case scenario, in step two, let's assume that you've got this rental
property, and it's breaking even cash flow, or maybe giving you a little bit of money; maybe a
hundred, maybe a two hundred dollars a month. But it's really not something you can't stop
doing your step one on because it's not producing enough income. So that step two: you're
seventy five/twenty five for every three deals that you're flipping, then the fourth deal you're
keeping as a rental. That leads us to step three.

Building Wealth
This is where you can really build your wealth so that you don't have to be chasing money all
the time. As you're doing deals, and as you've got some rental properties- well, inevitably some
of these properties are ones that you're going to be happy that you got, and other ones you can
say, "I'd really like to get rid of these rentals!" for whatever reason. And that's okay because
what you want to start doing is focusing on the rentals. You want to get those paid off. Now you
can do that with the step one type of deal we're doing where you're just buying and selling
you're getting a chunk of cash so you can start paying it down, or you can sell some of the
rental properties that you've got. But either way, you want to start having a stable of houses that
become free and clear. Because then, those houses- those one time deals, start paying you
each month. That's known as residual income, that's known as passive monthly income. So the
great thing about that is when you've got a handful of these, you can start considering maybe
taking a day off because you don't have to chase money so much anymore. Because there's
going to come a time in your investing in your life where you can say,

"You know, I don't want to have to work as hard anymore," or, "I don’t want to have to work at
all" Now how many rental properties will it take for that to be the case? Well, it depends how
much money you make now, how you're surviving now, and chances are, generally speaking,
you're probably not making, you know, a huge amount of money that we think of the rich people
making, right? But you've got enough to live on and everything's cool.

As you are doing the step one type of deals and even the step two type of deals, you can pay
off your debt, so your overhead becomes lower doesn't cost as much to live. You know, we
need to keep our spending in check, not be buying everything. It's important to pay it in cash,
get a discount. Now you can be living the lifestyle you want with things that are free and clear,
and I'm talking about toys here, that you've gotten at a discount, because so many of the people
that we think of as rich- they're renting their lifestyle. The things they're driving the things they
own- they're making payments on these things. They don't really own those things. So, the
wealth is a facade, and I don't want that to be the case for you. So in step three, we're paying off
some of the houses that we've got as rentals, and then those properties are paying us each
month. So how many do we need?

Let's just say that each one's making about a thousand dollars a month- I know it's different in
different areas, but that'll make it easy. So what do you need, is three thousand dollars a month
enough? Are you making four thousand dollars a month, so do you need for properties like that?
Would you like ten properties like that, because you really want to live high on the hog and then
some? Well, no problem but at least you've got a goal, and that's what this three-step formula is
all about.


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