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Apache is functioning normally

June 7, 2023 by Brett Tams

[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Groundbreaker.]

A real estate investment management platform, Groundbreaker gives teams access to CRM, portfolio management, fundraising automation, distribution tracking, and real-time reporting. Its software also handles compliance and security using ​​a built-in investor accreditation questionnaire and hosting data in SOC 1- (AKA “SSAE 16”), SOC 2-, and SOC 3-compliant data centers.

Real estate underwriter Jake Marmulstein founded the company in 2017.

What we like: The investor portal is a clear win over the piecemeal spreadsheets, decks, document file storage, and email historically used in preparing investment materials and managing investor relations.

Learn More

Source: geekestateblog.com

Posted in: Paying Off Debts Tagged: 2, 2017, automation, Blog, Built, clear, companies, company, Compliance, CRM, data, decks, Entrepreneurs and Tech, estate, Financial Wize, FinancialWize, Fundraising, GEM, Groundbreaker, in, investment, Investor, Jake Marmulstein, Learn, Mastermind Showcase, News, portfolio, portfolio management, Real Estate, Real Estate Investing, real estate investment, security, Software, spreadsheets, storage, time, tracking

Apache is functioning normally

June 3, 2023 by Brett Tams

A hedge fund is an investment vehicle that invests in securities and other assets with money pooled from investors. They’re similar to mutual funds or exchange-traded funds, but they are riskier and more expensive. Because of this, they’re subject to different government regulations and only sophisticated investors.

While most investors may not engage with a hedge fund, especially younger ones, it can be useful to know what they are and how they work.

What Is a Hedge Fund?

Hedge funds are set up by a registered investment advisor or money manager, often as a limited liability company (LLC) or a limited partnership (LP). They differ from mutual funds in that they have more investment freedom, so they’re able to make riskier investments.

By using aggressive investing tactics, such as short-selling, debt-based investing, and leveraging hedge funds can potentially deliver higher-than-market returns, but they also have higher risks than other types of investments. In addition to traditional asset classes, hedge funds can a diverse array of alternative assets, including art, real estate, and currencies.

Hedge funds tend to seek out short-term investments rather than long-term investments. Of course assets that have significant short-term growth potential can also have greater short term losses.

Historically, hedge funds have not performed as well as safer investments, such as stock market indices. However, the goal of hedge funds isn’t necessarily to outperform the stock market. Investors also use hedge funds to provide growth during all phases of market growth and decline, providing diversification to a portfolio that also contains stocks, cash, and other investments.

Generally speaking, only qualified investors and institutional investors are able to invest in hedge funds, due to their risks and the high fees that get paid to fund managers.

Types of Hedge Funds

Each hedge fund has a different investing philosophy and invests in different types of assets. Some different hedge fund strategies include:

•   Real estate investing

•   Junk bond investing

•   Specialized asset class investing such as art, music, or patents

•   Long-only equity investing (no short selling)

•   Private equity investing, in which the fund only invests in privately-held businesses. In some cases the hedge fund gets involved in the business operations and helps to take the company public.

What Is a Hedge Fund Manager?

Hedge funds are run by investment managers who make investment decisions and manage the risk level of the fund. If a hedge fund is profitable, the hedge fund manager can make a significant amount of money, often up to 20% of the profits.

Before selecting and investing in a hedge fund, it’s important to look into the fund manager’s history as well as their investing strategy and fees. This information can be found on the manager’s Form ADV, which you can find on the fund’s website as well as through the Security and Exchange Commission’s (SEC) website.

Who Can Invest in a Hedge Fund?

Hedge funds are not open to the general public, and there are several requirements to be able to invest in them. In order for an individual to invest, they must be an accredited investor. This means that they either:

•   Have an individual annual income of $200,000 or more. If the married investors must have a combined income of $300,000 per year or more. They must have had this level of income for at least two consecutive years and expect to continue to earn this level of income.

•   Or, the investor must have an individual or combined net worth of $1 million or more, excluding their primary residence.

If the investor is an entity rather than an individual, they must:

•   Be a trust with a net worth of at least $5 million. The trust can’t have been formed solely for the purpose of investing, and must be run by a “sophisticated” investor, defined by the SEC as someone with sufficient knowledge and experience with investing and the potential risks involved.

•   Or, the entity can be a group of accredited investors.

How to Invest in a Hedge Fund

Investing in hedge funds is risky and involves a deep understanding of financial markets. Before investing, there are several things to consider:

The Fund’s Investing Strategy

Start by researching the hedge fund manager and their history in the industry. Look at the types of assets the fund invests in, read the fund’s prospectus and other materials to understand the opportunity cost and risk. Generally speaking, the higher the risk, the higher potential returns.

In addition, you need to understand how the fund evaluates potential investments. If the fund invests in alternative assets, these may be difficult to value and may also have lower liquidity.

Understand the Minimums

Investment requirements can range between $100,000 to $2 million or more. Hedge funds have less liquidity than stocks or bonds, and some require that money stays invested in the fund for a specific amount of time before it can be withdrawn. It’s also common for there to be lock-up periods for funds and for there to only be certain times of year when funds can be withdrawn.

Confirm You Can Make the Investment

Make sure that the fund you’re interested in is an open fund, meaning that it accepts new investors. Financial professionals can help with this research process. Each hedge fund will evaluate an individual’s accreditation status using their own methods. They may require personal information about income, debt, and assets.

Understand the Fees

Usually hedge funds charge an asset management fee of 1-2% of invested assets, as well as a performance fee of 20% of the hedge fund’s profits.

The Takeaway

Hedge funds offer investors — usually, wealthier investors — the chance to invest in funds that are usually high-risk, but offer high potential returns. There are many rules surrounding hedge funds, and many investors may not even consider them as a part of an investing strategy.

For accredited investors, investing in a hedge fund may be one part of a diversified portfolio, although it depends on the investor’s risk tolerance, time horizon, and investing goals. If you’re not an accredited investor, or you’re worried about the risks associated with hedge funds, it may make more sense for you to consider other types of investments or to stick with ETFs, mutual funds, or funds of funds that emulate hedge fund strategies.

Ready to invest in your goals? It’s easy to get started when you open an Active Invest account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

For a limited time, opening and funding an account gives you the opportunity to win up to $1,000 in the stock of your choice.


Photo credit: iStock/gece33

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Fund Fees
If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.

Claw Promotion: Customer must fund their Active Invest account with at least $10 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

SOIN0523112

Source: sofi.com

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Apache is functioning normally

May 30, 2023 by Brett Tams

A fall day in the park

Investing requires resolve and a long-term vision, but it doesn’t actually have to involve the stock market. Here’s a guide to non-stock investing options:

Precious Metals

During the Great Recession, precious metal commodities like gold and silver were all the rage. As the stock market lost more than 50 percent of its value, gold and silver started a monumental rise in price. Gold went from around $600 per ounce in 2007 to peak at $1,900 per ounce in 2011.

The prices of the most popular commodities have since fallen from their peak; but had you invested in precious metals for that period of time (and others like it in history), you would have netted a healthy profit for your portfolio.

Relying solely on precious metals for your portfolio is extremely risky, though, and I wouldn’t suggest it. However, commodities do tend to act in an opposite manner to the stock market, and using precious metals as a hedge against volatility can be a great strategy.

Related >> Beginners’ Guide to Investing

Peer-to-Peer Lending

Peer-to-peer lending is one of my favorite alternative investments. It is the ultimate win-win for consumers. Consumer “A” gets a loan from Consumer “B” (and typically a large group of other investing consumers). Then Consumer A gets to pay off high-interest-rate credit card debt that stands at 20 percent with a personal loan that has a fixed term and a fixed interest rate of, say, 10 percent. This also means a fixed payment each month.

For their part, Consumer B and his friends get to enjoy a much higher rate of return than they would be able to reach with cash sitting in the bank. Both sides win: The borrower gets a lower rate and a fixed term to pay off the loan while the lender enjoys a healthy rate of return.

It’s true that some see peer-to-peer lending as a risky asset class because you are relying on strangers to pay the loan back. As with any type of investing, you don’t want to put all your eggs into one basket. Diversifying your portfolio of loans helps tremendously when you do experience a loan that goes unpaid. (Plus, P2P websites like Lending Club and Prosper have collection methods that kick in on borrowers who miss payments.)

I’ve become so enamored with peer-to-peer lending that I decided to embark on a little experiment. I divvied up about half of my Solo 401(k )contribution into both Lending Club and Prosper. The goal of the experiment was two-fold:

  1. See how much interest I could make with this investment strategy.
  2. Compare the two companies to see which one provided better earnings.

Overall, I was pleased with the results. Both companies netted double-digit returns for me, and I plan to add more money into these investments.

Owning a Business

Hands down, I think the alternative investment with the highest potential rate of return is running your own business. This isn’t without risk — the vast majority of small businesses die within five years — but if you can outlast the statistics, it can be extremely rewarding.

I used to work for a company providing financial advisory services. I took a huge leap of faith, started a business, and started blogging. My financial planning business has thrived and my blog has earned well over six figures since I started.

The beautiful thing about running a small business is not only are you the boss, but you can grow and maintain it as much as you want. Maybe you love your full-time job but you want to try out a new skill. Spend your nights and weekends trying it out, earn some extra dough, and keep working full time. Even a little side income can make a huge difference in your financial life, and when you don’t have time to maintain it, then slow down and focus on other priorities.

Related >> Best side jobs for extra cash

Real Estate

If you’re interested in…

-significant cash flow

-leveraging other people’s money

-enjoying large tax write-offs

…then real estate can be a great choice.

Let me be clear so I don’t sound like a late-night infomercial: Real estate investing is difficult. The learning curve is significant. When you first start, you *are* putting all of your eggs in one basket because you will only have one property to rent out or flip. A previous GRS writer shared his experience of rushing into real estate investing.

Many people have lost their shirts trying to get rich with real estate. Even Dave Ramsey went bankrupt based on a series of really poor real estate investments at the start of his career.

Amid all the horror stories about crazy tenants, poor cash flow, and something always breaking, there is some significant income to be had from real estate investing. What’s better is you don’t have to put 100 percent down on a house. You can usually get away with 25 percent to 35 percent as a down payment and let the bank fund the rest of the purchase. This leverage means you can leave more money in reserve for the inevitable issues that pop up or to expand into a larger number of properties faster.

Bonds

Nearing retirement? You’ll want to cut back on your stock allocation and put some of those funds into bonds. You might associate bonds with the stock market because they are so commonly paired with stocks in a portfolio, but technically bonds are traded on the bond market. You won’t generate sky-high returns here, but you will also cut out a majority of the volatility you get from stocks. Very few bond investments have lost 50 percent of their value for two years and then returned 100 percent the next four years.

Related >> Investing 101: How Bonds Work

Investing in individual bonds carries more risk because they are not diversified. If the company that issues the bond goes under, you might not get your principal investment back. However, bond ETFs and mutual funds can provide the non-stock exposure of bonds with the added benefit of diversification.

Certificates of Deposit

The lowly certificate of deposit or CD. Simple. Basic. Low return.

And sometimes. . . just what the doctor ordered.

A CD is a simple financial product where you hand over some cash to a bank or credit union for a set period of time and a set interest rate. If you have less than $250,000 in total assets at that bank or credit union — across *all* accounts — your investment principal is guaranteed by the FDIC. You literally cannot lose the principal balance if you use this method.

The upside of CDs is stability and guarantee. The downside is, at least right now, inflation will be eating away at your principal balance. Certificate of deposit rates are extremely low due to the Federal Reserve’s monetary policies but if rock-solid security is your number one investment driver, this is worth a look.

Related >> Best CD Rates

Annuities

Ewww. . . annuities. Don’t all personal finance bloggers hate annuities?

Listen, I get it. Annuities CAN be bad. Terrible, in fact. Fees, confusing contract terms, and an encyclopedia of fine print.

Most people don’t realize there are several types of annuities: fixed, immediate, variable, equity-indexed, and several more.

Hear me out. The right annuity with the right, sensible, un-scammy terms can be a solid foundation for a retirement portfolio.

In fact, Mike Piper, a previous GRS contributor, shared how you can create retirement income by purchasing the right annuity.

But like any investment, buy with caution. And be wary of commission-hungry, shady advisers just looking to make a sale vs. matching you with an investment that works toward your financial goals.

Yourself

Last but certainly not least, investing in yourself can pay dramatic dividends. I have personally done this in a variety of ways. Besides getting my CFP certification — certified financial planner — another major investment I made in myself was signing up for a coaching program.

I can’t blame you if you’re skeptical about coaching programs. I was too. It’s been more than three years since I signed up for The Strategic Coaching program and it has literally been the best investment I ever made. The mentoring has allowed me to grow my business significantly, and the return on what I paid has been tremendous. It makes a 9 percent return in the stock market look like nothing.

In all, when you think of investing, you don’t have to immediately think of bull or bear markets or even markets at all. There are other avenues to explore. Let us know what’s working for you in the comments section below.

Source: getrichslowly.org

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Apache is functioning normally

May 29, 2023 by Brett Tams

If you’ve ruled out winning the lottery as your chance to become a millionaire, you must have considered real estate investing a viable opportunity.

And if you haven’t, this article will plant the seed.

Real estate data firm PropertyShark took a closer look at how many property owners have made a good profit off of selling their homes since the turn of the century. More specifically, they looked at homes bought before 2001 for less than $1 million, later to be sold by their owner for $1+ million.

They then grouped the data by city, to give us a clear picture of the thriving real estate markets where investing in property can take us one step closer to becoming a millionaire. Here’s how they map out:

real-estate-millionaires-by-city
Image credit: PropertyShark.com

The city to land first place is — unsurprisingly — San Francisco, which minted 381 million real estate millionaires as the market skyrocketed in the past two decades. That puts it ahead of Manhattan, which, despite being double the size of San Francisco, only saw 335 people become millionaires off of selling their properties.

A more unexpected finding was that the Los Angeles market lost the third spot in favor of Brooklyn; the New York borough came in on #3, with 281 people making a good profit off of selling their homes for over $1 million.

Trailing closely behind, “the city of Los Angeles, with a population of more than 3.9 million, made 280 people millionaires since the turn of the century,” Robert Demeter reports for PropertyShark, adding that “L.A. isn’t as expensive as some of the neighboring cities in the county, but being spread out with a large number of residents, it’s no surprise it made it so high on our list. Affluent neighborhoods such as Bel-Air, Venice Beach and Brentwood most certainly paved the way for homeowners to become millionaires after selling their properties.”

Other notable markets where people achieved millionaire status by selling their homes are Potomac, MD (182 millionaires), Bethesda, MD (175 millionaires), San Jose, CA (119 millionaires), Queens, NY (93 millionaires), Scottsdale, AZ (86 millionaires), and Plainfield, IL (78 millionaires).

Out of the top 25 “millionaire cities”, 7 are located in the Silicon Valley area, where the median home price regularly goes over the $1 million mark.

It’s worth noting that the study only looked at the profits made off of selling homes in these markets with a sale price over $1 million.

It doesn’t take into account other financial holdings, investments or net worth of these individuals, who may have already been millionaires before selling their homes.

However, it’s a great indicator of markets that are most likely to mint out millionaires after buying local real estate.

Source: fancypantshomes.com

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Apache is functioning normally

May 27, 2023 by Brett Tams

When I worked in management consulting, one of my responsibilities was to help my company figure out ways to make money while we slept. As a consulting business, our revenue stream came from selling the hours of the people who worked at our company. But to grow our margins, we knew we had to scale our time. This is where I first learned about passive income — the Holy Grail of the business world.

Now that I’m in my 30s, I think a lot about how to direct my active streams of income into passive income opportunities. Here are some things I’ve learned about active and passive income in my wealth-building journey.

What’s Ahead:

What Is Active Income?

Active income is earned by trading your time for money. Most people at the beginning of their careers are focused solely on earning active income to make a living.

What Is Passive Income?

Passive income is earned from income-producing assets. Someone who has passive income is not trading their time for money. Instead, the assets they own produce income without much involvement from the owner of the asset.

With the rise of financial influencers and the FIRE movement, finding ways to earn passive income has become a popular topic in the personal finance community.

Is Any Income Truly ‘Passive’?

The idea of earning truly passive income sounds amazing, right? But what’s often not discussed about passive income is that unless you inherit passive income-producing assets, creating passive income streams actually requires a substantial amount of active work.

Famous American entrepreneur Gary Vaynerchuk has gone as far as to say that truly passive income doesn’t exist outside of passive public market investing and rental income.

I tend to agree with Gary that the term ‘passive’ income is something of a misnomer. Creating passive income is never truly passive; there is no free lunch when it comes to financial mobility!

But thinking of income in active and passive terms might nonetheless have some benefits for those who are assessing their current financial status and crafting their wealth-building strategy. For that reason, I’ll break down the broad differences between active and passive income streams, as well as the most prominent ways to generate active or passive income.

Pros & Cons of Active Income

Pros

  • Allows you to develop a specific skill or expertise consistently
  • May provide social interaction and camaraderie associated with a traditional worksite

Cons

  • Trades time for money
  • Takes time away from doing other things
  • Cannot scale income potential beyond time constraints
  • Can be taxed at high rates

Pros & Cons of Passive Income

Pros

  • Generates money while sleeping, vacationing, etc.
  • Frees up more time for recreational activities
  • Subject to potential tax deductions
  • Scales income potential beyond time constraints
  • Does not require physical presence at a work site

Cons

  • Often requires you to create active income first
  • Usually harder to create than active income

Types of Active Income

Salary and Wages

The most basic and obvious form of active income is the salary that you earn from a typical job. A salary is a fixed amount received for working a regular schedule like 9 to 5, Monday through Friday. While a salary is a consistent form of active income, it can be taken away at a moment’s notice due to layoffs or downsizing. Most people earn their living from this type of income.

Bonuses and Commissions

Bonuses and commissions are other forms of active income. This type of income is not fixed and can vary dramatically based on the type of work performed. Many jobs can have a bonus or commission element added to a base salary, while other jobs can be 100% commission based.

Real estate agents, commercial real estate sales professionals, and other types of salespeople tend to fall into this income category. 100% commission-based jobs tend to have higher earning potential compared to salaried positions. However, they are also highly competitive, and their profitability is subject to ups and downs based on the economy, seasonality, and other factors.

Read more: How to Become a Real Estate Agent

Consulting and Freelancing

Freelancing and consulting fees are other types of active income that can either make up 100% of one’s income or serve as a side hustle. Those with valuable skills in high demand are often able to build side businesses, selling their time for specific short-term projects or long-term contracts. As of August 2021, there are 57 million freelancers working in the U.S., with 10 million more considering freelancing.

Looking ahead, more and more businesses are noting they’re willing to hire freelancers to support their mission, growth, and revenue.

Being a freelancer or consultant requires an entrepreneurial spirit, as this type of work can be very inconsistent and requires building a strong brand/reputation. Some of the most popular types of freelance work include graphic design, software development, copywriting, and photography.

Read more: 35+ Side Hustle Ideas

Equity Compensation

Equity compensation is a type of bonus that is given out at public or private companies to senior individuals or particularly valuable employees. Different types of equity compensation include straight shares, stock options, and Restricted Stock Units (RSUs).

It’s not uncommon for equity compensation to make up most of an individual’s income. For example, in 2020, 85% of an average CEO’s income was stock-related compensation.

Capital Gains

Buying and selling certain types of assets, like stocks and real estate, can generate capital gains if the asset’s sale price was higher than its original purchase price. For example, you might buy shares in a company while its stock price is low and then sell those shares later after the stock’s price has increased. The difference between the price you paid and the price you sold at is a capital gain.

Generating capital gains as a means of consistent income requires a significant amount of work, expertise, and risk-taking. Capital gains also have different tax treatments depending on how and when they are generated.

Read more: Claiming Capital Gains and Losses

Renting Out Property

Listing your property on sites like Airbnb can help you earn active income. While listing your property for rent may not require a significant investment of time and energy upfront, it’s not a set-it-and-forget-it income source.

Actively managing your listings, communicating with renters, and maintaining your property certainly requires active effort (unless you have a property manager).

Old Goods and Furniture Flipping

I’ve seen lots of people recently on TikTok and Instagram building side businesses by taking old or broken furniture, refurbishing it, and selling it for a profit. If you are handy and have an eye for design, this can be a great way of making active income given the low startup costs.

In addition to making money from selling the furniture, after you’ve built an audience you can sign brand partners and feature their products on your social media pages to generate even more income. Lastly, this type of business is a great way to help recycle old products that would have otherwise been thrown out.

Types of Passive Income

Interest and Dividends

Interest from your savings can be generated from high-yield savings accounts or by investing in CDs or bonds.

Dividends are paid to the shareholders of public companies. Not all companies pay dividends and the amount of dividends paid varies significantly. While earning dividends is passive income, choosing the right investments that generate dividends is a very active and time-consuming process.

In my experience, those looking to earn dividends can typically expect returns of 1–5%.

Rental Income

You can earn passive income from real estate by investing in rental properties, commercial real estate, public real estate investment trusts, or real estate crowdfunding platforms. Income-generating real estate can also provide landlords with tax benefits by deducting depreciation costs, property management expenses, insurance, and other expenses.

But there’s always an active element of real estate investing, no matter what type of real estate you invest in. This includes property management, dealing with tenants, managing relationships with lenders or investors, ensuring upkeep, or simply picking the right real estate projects to invest in. Some forms of real estate investing can become so time consuming that many personal finance experts question if real estate investing can be considered passive at all.

Read more: How to Invest in Real Estate

Peer-to-Peer (P2P) Lending

Peer-to-peer lending has attracted investors looking for an alternative to persistently low interest rates on savings accounts and bond yields. With P2P loans, investors make unsecured personal loans to others and can earn high returns.

While P2P lending has exploded in popularity (check out Lending Club and Prosper), these investments are very risky. The loans are often not secured against collateral, are not FDIC insured, and money invested in P2P lending can be difficult to access in times of economic stress.

Digital Product, Online Course, or Community Development

Creating digital products, courses, or online communities can be one of the best ways to earn passive income if you can package your skills and knowledge and sell it to a group of customers. In today’s digital age, the costs of creating a course, digital product, or community have never been lower, and all you really need is a computer and some creativity.

While there are lots of instances of everyday people earning millions on their digital products, don’t forget that getting to that point likely required a lot of work. Keeping these types of products relevant and up to date after launch also requires time, effort, and attention, not to mention having to market your product and keep up community engagement.

If you are interested in starting something like this up, platforms like Thinkific, Teachable, and Patreon are all options to explore.

YouTube/TikTok Ad Revenue

I became fascinated by the prospect of earning money on YouTube after coming across financial influencer Graham Stephan. Earning money on YouTube or Tik Tok generally comes down to building your channel’s audience and monetizing content through ads or affiliate marketing links. Once your presence meets a critical mass, every video you create has the potential to become an income-generating asset.

On the surface, making money on YouTube seems amazing, but again, it takes a lot of work and dedication to get there. For example, Graham has mentioned having to post videos at least three times a week for several years to get traction. And it often takes audiences of tens of thousands or hundreds of thousands of followers to earn any money.

But there’s lots of potential to earn sizable passive income from YouTube after you build an audience. The average YouTuber can make $3 to $5 per 1,000 video views and the top YouTubers can make millions annually.

Final Thoughts

Passive income can be a great way to earn more while working a regular 9 to 5, or it could fully replace your current stream(s) of active income entirely.

When it comes to building real wealth, however, the discussion around active vs. passive income is more nuanced.

According to a five-year study of 233 wealthy individuals, a common thread between them was that self-made millionaires generated income from multiple sources. 65% of them had three streams of income, 45% had four streams of income, and 29% had five or more streams of income.

These figures suggest that when it comes to building wealth, it’s not just a question of prioritizing passive vs. active income. Rather, it’s about generating multiple streams of income and scaling your time.

Personally, I have four streams of income:

  1. The income I make from my 9 to 5
  2. Investment capital gains
  3. Dividends
  4. Freelancing work

You can leave it to your own creativity and aspirations to find what constellation of passive and active income streams works best for you. But remember, whether you are looking to create passive or active income, there is no free lunch, and any source of income that ultimately becomes passive will likely start as a highly active pursuit.

Read More:

Source: moneyunder30.com

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Apache is functioning normally

May 26, 2023 by Brett Tams

Hi there!

This post is an illustrated, pared-down version of my recent “Inflation, Explained” podcast episode. 

It was created as a simple, easy-to-digest guide to help you understand the current inflationary environment in the US.

Ready? Let’s dive in!

What is inflation?

Simple definition: too much money chasing too few goods.

– a.k.a. this: –

When Does it Happen?

When the growth of the money supply outpaces the growth of the economy

The money supply grows from…

– Printing & issuance of new money

– The government loaning money into banking system by purchasing government bonds

– The government deciding to legally devalue currency*

(*The U.S. dollar has only been deliberately devalued once, in 1933-1934)

When demand outpaces supply, (aka too much money chasing too few goods) which causes prices to rise.

What this can look like…

– Higher demand for goods that can’t quickly or easily increase in supply. (More on this in a minute.)

– Manufacturers and retailers facing higher production costs due to external factors driving up the cost of raw materials or manufacturing. These higher costs get passed down to the end consumer.

Fun fact!

There’s also something called the “wage price spiral.”

It takes place when…

1. Prices begin to rise,

2. Causing life to get generally more expensive,

3. And so workers ask for higher salaries,

4. Which employers pay,

5. And then the employers have to raise the price of **their own goods and services** to pay those increased labor costs!

6. …Which then cycles back to step 1 and compounds, pushing prices up further.

(If this sounds familiar, it’s because this has been our reality for the past 2 years!)

What the wage price spiral has looked like these past couple years:

Services were unavailable (e.g. concerts, restaurants, travel, etc.) so people turned their attention towards goods.

Meanwhile, stimulus checks increased money supply and kept consumer confidence high…

But at the same time, the supply chain capabilities couldn’t meet all the added demand for goods.

Fun fact!

In many sectors, producers must make large capital expenditures in order to increase production capacity. (For example: lumber millers.) These heavy CapEx investments require a long lead time, often multi-year.

Many producers lack either the capital to invest, or the confidence that the increased demand will persist. They don’t want to invest in CapEx for fear that two years down the line they’ll be overproducing for lower demand.

On top of all this, there are a lot of people opting out of the work force, whether for home schooling, general Covid concerns, caring for a family member, relocation, etc.

This further compounds the wage price spiral.

What are the effects of inflation?

Background info…

1. Some degree of **controlled inflation** is desirable for the economy, because it causes investors to look for investments to outpace inflation.

(📈 Investment activity = ⛽️ Fuel for the economy)

2. Controlled inflation also encourages consumers to spend now since tomorrow’s cash is worth less than today’s.

(💸 Money changing hands = ⛽️ More fuel for the economy)

The takeaway here…

All this is to say that inflation can be a good thing.

But!!! It needs to be managed carefully.

Fun fact!

For developed economies, around 2 percent inflation is the targeted “sweet spot” amount.

For developing economies, the targeted amount is usually higher. For example, India targets 4 percent. (+/- 2%)

With that background info out of the way, let’s move on to…

“How does inflation affect me?”

Who inflation is good for…

1. Borrowers

Once the banking system has money (from the government buying bonds), they’re able to loan it out.

The people who are able to get these loans are poised to benefit *significantly* as inflation picks up, especially the borrowers who were able to get fixed-rate loans.

Why?

If you have a fixed-rate loan with a rate that’s *lower* than inflation, it means that over time you repay that loan with cheaper and cheaper dollars.

2. Exporters

Inflation is good for exporters because they pay lower production costs associated with a weaker USD and sell their products in a stronger currency.

Who inflation is bad for…

1. Savers

Your dollar can buy less stuff, and the value of your cash gets eroded the longer you hold it.

2. Importers

The weaker USD means foreign-made goods are effectively more expensive.

How different assets are affected by inflation

Tangible assets

Tangible assets (that are valued in currency) are strong inflation hedges.

These allow you to store monetary value in something other than currency.

Examples include real estate (residential, commercial, land), commodities (oil, natural gas, precious metals, wheat and corn), art, and jewelry.

As inflation increases, often so could the value of these assets.

How to get a triple win!

If you were to take out a fixed-rate mortgage to buy real estate, you’d have a fantastic setup for an inflationary environment.

Here’s why:

1. You’d own an asset that historically has performed incredibly well in inflationary periods

2. You’d have a locked-in fixed-rate mortgage that you secured before interest rates rise further (the Fed has 7 rate hikes planned for 2022, and more for 2023)

3. You’d repay your mortgage with cheaper dollars over time

(Check out my free “2022 Real Estate Inflation & Recession Guide”  for an in-depth overview of real estate investing in our current inflationary environment.)

What about stocks?

Historically, stocks and real estate have been great hedges against inflation.

But not all stocks are equally strong in inflationary periods.

Growth Stocks = 👎

Growth stocks are stocks that look promising for the future but don’t have particularly great numbers right now.

(e.g. Amazon, Facebook, Netflix, etc.)

Growth stocks usually take a hit during high-inflation environments. 💩

Value Stocks = 👍

Value stocks are stocks for companies that are doing well today but that investors believe are underpriced in the market relative to their performance.

Value stocks historically have done well in high-inflation environments. 📈

Fun fact!

Many (but not all) tech stocks are growth stocks, and several tech stocks (the “FAANG” stocks — Meta, Amazon, Apple, Netflix, Alphabet) also represent the largest cap stocks in the index.

This is one reason why we’ve seen such huge swings in the overall stock market lately…

Investors have been reassessing what they’re willing to pay for potential future returns on growth stocks in light of our high inflationary environment.

When the Fed tightens the money supply, there’s a risk of recession, which means battling inflation necessarily holds a degree of recession risk. This makes investors more cautious.

Said another way…

Lots of growth stocks being sold
+
Those stocks representing a large percentage of the total market cap
=
Volatility in the stock market

Takeaways and next steps

Hopefully you now have a better foundational understanding of inflation and how it affects you.

Here’s what to do next…

Stay Calm

Don’t get too wrapped up in headlines.

Don’t blow up your entire strategy and portfolio.

Remember that you’re in this for the long game, and that smart investing is about being patient and strategic, NOT trying to time the market.

Evaluate your portfolio

Take a look at your portfolio and ask yourself how your portfolio will fare if this inflationary environment lasts 2, 3, or even 5 years.*

(*Note: Historically in the U.S., it’s taken an average of slightly over two years — 27 months — for inflation to reach its ideal 2 percent target, as measured from the inflation rate at the start of a recession).

Know thyself

Start with the end in mind. Before you make changes to your portfolio, think about your investment goals, timelines, risk tolerance and risk capacity.

Fun fact!

If you’re interested in real estate investing, your next step is to check out my 2022 Real Estate Inflation & Recession Guide.

You’ll get answers to questions like…

– “How do rising interest rates affect real estate investing?”

– “If there’s a recession in 2022, will housing prices tank like they did in 2008?”

– “Can good deals still be found, or have I missed the boat?”

– “How should I set up my portfolio to handle inflation and a recession?”

Just let me know where I should send it…

What NOT to do

Don’t dump all your money into any asset that you’re not ready for.

Don’t panic-buy a house because you’re afraid of getting priced out of the market.

Don’t blow up your entire portfolio.

Don’t radically change your investing style, asset mix and timeline. Remember to think in decades; invest for the long-term.

Aim for balance and flexibility, and the right amount of liquidity for your lifestyle needs.

Thanks for reading!

If you have a friend or family member who could use some clarity about inflation, I’ll love you forever (as will they!) if you share this post with them.

And if you’re interested in real estate investing, be sure to check out my 2022 Real Estate Inflation & Recession Guide.

Stay calm out there,

— Paula

Source: affordanything.com

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Apache is functioning normally

May 26, 2023 by Brett Tams

How to take a good rental property listing photo

“Invest during a pandemic? Are you crazy?”

That’s a reasonable question. Why would anyone want to invest in a volatile market and in the midst of economic uncertainty?

But recessions create opportunities. Yes, it’s terrible that millions have lost jobs and suffered huge portfolio losses, but the unfortunate reality is recessions happen. Like it or not, this is our current situation. By looking at the market and asking “what opportunities can I find?,” we contribute to the recovery.

We contribute to the recovery in all types of investments: stocks, real estate, side hustles.

When we buy stocks, we infuse capital into companies that we believe in and/or into the market as a whole.

When we buy, renovate and rent properties, we create jobs for contractors, agents and property managers and we offer our tenants a safe, comfortable and well-maintained home.

When we start a side hustle, we build products or services that thrill our clients and create jobs for our team.

When we invest, we participate in the recovery. Recessions are an unfortunate fact of life, but they carry a silver lining. And for newbie investors in particular, recessions can open the door.

Unfortunately, during times of uncertainty, many people surrender to their fear of investing. They sit in cash until it’s too late.

To be clear, I’m not talking about people who don’t have the capital to invest. If someone is financially unstable — if they lack an adequate emergency fund, for example, or if they’re buried in high-interest credit card debt — then they should be applauded for focusing on the fundamentals first. Build the foundation; everything else rests on that.

But many financially stable people will sit on excess piles of cash.

I get it. Investing is scary during a recession.

It’s normal to feel scared of buying index funds, only to watch them drop the next day. It’s natural to feel scared to start a side hustle, when you know this is a tough time for small businesses. It’s normal to feel scared about buying a rental property; what if your tenants lose their jobs?

But by sitting on too much cash, you miss the opportunity to pick up undervalued deals.

You also miss the chance to start building momentum, so that when the economy starts rebounding, you’re already established. You’ve started the side hustle. You own the rental property. You’re not scrambling to get started after the recovery is underway; your projects are in place.

You might not have enough cash to buy cheap assets at this moment. That’s okay. Focus on the fundamentals (like building an emergency fund) and don’t worry.

If you’re fortunate enough to be able to invest, though, don’t sit out this opportunity due to fear.


We discussed stocks at length in this podcast episode, and we talked broadly about how to finish 2020 financially stronger than you started in this episode.

In this article, we’ll focus on real estate.

Should you invest in rentals during a pandemic? Might we see another housing crash, 2008-style? Is this a good time to buy? To sell? Let’s explore.

“Is the real estate market going to crash again?”

Have you heard of the availability heuristic?

It’s defined as “the tendency to overestimate the likelihood of events with greater ‘availability’ in memory.”

We overvalue examples that can easily come to mind, while we undervalue examples that are harder to imagine or recall.

If something happened recently or if something is emotionally charged, then it’ll easily come to mind. And if it easily comes to mind, we overestimate the likelihood that it’ll happen again.

Prior to the pandemic, the 2008 housing crash was the most recent recession. It comes to mind quickly: it was recent and suuuuper emotionally charged.

And so it’s natural — it’s logically flawed, but natural — to assume that this current recession will resemble the last one, to overestimate the likelihood of another housing crash.

But the factors that led to the 2008 recession (subprime lending, speculative building, shady credit-default swaps) are nothing like the factors that led to the 2020 economic collapse (a deadly virus).

The Great Recession was created by weakness in the housing market. The chain of events in 2008 wasn’t: “a recession struck, therefore home prices collapsed.” It was the opposite: “home prices collapsed, therefore recession struck.”

If you started investing before the 2002 dot-com burst, or if you were already an adult during the 1987 market crash, you’ve experienced bear markets that didn’t coincide with a housing crash. But if you’re under 40, the Great Recession was the first major recession in your adult life.

If that’s your situation, then it’s especially tempting to associate recessions with real estate crashes. After all, as a millennial, 100 percent of the recessions of your adult life — 1 out of 1!! — have been tied to a massive real estate crash.

But that was a dozen years ago. The underlying economic factors are different today.

There may or may not be a temporary slight dip in housing prices. (I doubt it, but it’s possible.) If that happens, clickbait headlines will refer to this minor dip as a “crash,” because that’s eminently more clickable. Don’t be fooled by the phrasing.

Study the housing market. Read the price-per-square-foot declines. Look at the average days-on-market of homes for sale. Scan for the number of new mortgage loan originations. This data will tell you far more than any screaming headline.

“What if my tenants can’t pay rent?”

Let’s look at statistics:

In a normal market, around 20 percent of tenants are late in paying their rent, according to data from the National Multifamily Housing Council, which tracks 11.5 million apartment units nationwide.

In April 2020, that number increased from 20 percent to 31 percent. That’s not as bad as many landlords feared.

  • In normal conditions, 80 percent of tenants pay rent on time, and 20 percent are late.
  • In pandemic conditions, 69 percent of tenants pay rent on time, and 31 percent are late.

But wait! It gets better.

The NMHC surveyed apartment managers again one week later. They found a huge improvement: 84 percent of apartment households paid rent by April 12th.

Tenants might not be able to pay rent on the 1st of the month. But the overwhelming majority — 84 percent — were able to pay after a delay of less than two weeks.

As far as the data shows so far, worries that tenants won’t be able to pay rent have largely not come to pass. Most tenants are still able to pay rent; they just need extra time.

(The NMHC noted that a huge number of apartment managers volunteered to waive late fees or offer flexible payment plans.)

That said, millions of people have been helped by a combination of stimulus checks, enhanced unemployment benefits (which currently provides an extra $600 per week in addition to normal state unemployment benefits), or payroll protection if either they or their employer qualifies for Paycheck Protection Program funds. Will these programs get renewed or extended? What will happen if they don’t? There are many lingering questions, and the future remains to be seen.

The simple truth is that nobody can accurately predict the future. We can look at data about our current situation, and as of now, we know that 84 percent of tenants (out of 11.5 million household units) paid rent within two weeks of its due date. But we do not know if or how that number will change in the future. Variables that cannot be predicted — such as the speed of recovery, the level of government intervention — will play a major role in shaping these answers. We don’t know how those variables will take shape.

The greatest risk is assuming that we know the future. Beware of certainty. Those who pretend to know the future are clinging to security at the expense of honesty and accuracy. Don’t listen to any economic or market projections that are expressed with too much confidence. We don’t have a crystal ball. Nobody knows what the future holds. The wise ones recognize this and accept it.

We cannot state what will happen. We can only state what IS happening. And from that, we make preparations for what is and what might be.

“What risks should I be wary of?”

Of course, there are serious risks ahead. We do not know:

  1. … how long the pandemic and global shutdown will continue.
  2. … how long such a large portion of the population will remain unemployed.
  3. … how many employees have had their hours reduced or accepted a temporary paycut, and how this will reverberate throughout the economy.
  4. … how long the recovery will take.
  5. … whether or not there will be a tragic second wave, or third wave, which triggers an unavoidable second or third shutdown.

How can you approach smart real estate investing in this context?

Here are a few Do’s and Don’ts:

Don’t avoid investing. The people who made that mistake during the Great Recession — those who avoided making new investments from 2009-2012 — missed out on massive, opportunity-of-a-lifetime recovery gains.

Do thoroughly analyze any new rental investment that you’re eyeing. Run a variety of “what if” scenarios on a spreadsheet, crunching the numbers with different assumptions.

What if occupancy rates fell by an additional 10 percent? What if you reduced the rent by 20 percent for the next six months? How would this affect your returns?

In our course, Your First Rental Property, we provide robust, detailed spreadsheets for heavy number-crunching.

We teach our students that the cliché thrown around by other investors — who tell you to “calculate the return” — is too simplistic.

You’re not calculating “the” return; you’re calculating a range of possible returns.

You’re not stubbornly insisting that a given rental property will have an 8 percent cap rate. You’re calculating a range of cap rates in best-case, worst-case and middle-case scenarios.

Unfortunately, there are sellers who will advertise properties as having an “X” cap rate, and there are investors who take that information as a fixed number. That’s baloney.

Properties don’t have a single fixed cap rate; they have a range of cap rates, and we teach our students how to assess this range before they commit to a six-figure investment.

Don’t over-leverage. You don’t need to borrow every penny you qualify to receive.

Ignore the real estate investors who are fixated on cash-on-cash return, a popular formula that inherently rewards overleveraging.

Instead, focus on an investing strategy that prioritizes the property’s cap rate (essentially its dividend stream). This is the investment philosophy and strategy that we teach in our course.

Do maintain strong cash reserves. We teach our students to keep a minimum of three months’ gross rent, which translates to six months of operating expenses.

Don’t jump in without a specific, carefully-thought-out written plan. Before you start investing in rental properties, write your personal investor statement.

Your written investment statement should articulate how many properties you want to purchase, the speed or rate of acquisition, the type of financing you want to use, your ideal debt-to-equity ratio or leverage maximum, the type of neighborhood you want to target, the age and condition of properties you want to purchase, and more.

We provide a fill-in-the-blank template to guide you through this exercise in our course.

Do prepare a variety of ways that you can accommodate tenants who are financially struggling. Here are some examples:

Offer an incentive: 
Offer your tenants one month of free rent — which they can use immediately — if they extend their lease by an additional year.

This is a win-win scenario. You’re spared from the costs of a turnover and vacancy. You pass these savings directly to your tenant.

Waive late fees: 
If your tenant is waiting on unemployment benefits, they may not be able to pay rent on the 1st of the month. That’s fine; they’ll have the money once their benefits arrive.

Offer to waive late fees, under the condition that they stay communicative.

You want to avoid a tenant ‘ghosting’ you, screening and dodging calls from you or your property manager.

You can avert this situation by (1) letting them know you’re flexible and accommodating, and (2) telling them you’ll waive late fees as long as they send you frequent updates about their situation, like a quick text message or email, every two to three days.

Set specific and measurable communication criteria, such as: “Please text me with an update at least once every three days, even if your text is as simple as ‘hey I’m still waiting on my benefits to start’.”

Spread the payments:
Another option? If your tenant is waiting for their unemployment benefits to arrive, offer to spread next months’ payment across the rest of their lease.

Let’s say their rent is $800 per month, and they have 9 more months remaining on their lease. In this example, they would pay $0 next month, and their rent would rise by $100 per month for the remaining 8 months.


The Bottom Line: Recessions are tragic, but they also carry the hope and promise of a recovery. If you have money to invest, don’t let fear hold you back. Invest in the market, start a side hustle, or invest in rental properties. Don’t let another year or two slip by, and then scramble to get a foothold after the recovery is well underway.


Our flagship course, Your First Rental Property, opens for enrollment again on Monday, November 30th.

Learn about the course in this video below, or check out this page for FAQs, testimonials, and your chance to join our VIP waitlist. When you join, you get a free 7-day crash course on the fundamentals of residential real estate investing.

If you’re interested in investing in rental properties and want an A-to-Z guide of everything you need to know, learn all the details here.

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Source: affordanything.com

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Apache is functioning normally

May 26, 2023 by Brett Tams

May 25, 2020Written By Paula Pant

Photoshopped image depicting Paula as a real estate guru with Lamborghinis driven by cats

You know those flashy “real estate seminar” types, the ones who wear $10,000 wristwatches and flash cheesy Powerpoint slides of their Lamborghini at you? 🙄

Don’t trust them. (I reaaaalllly hope I’m stating the obvious.)

I call them Lamborgurus, driving their Scamborghinis. They can be found lurking in the spotlight, dispensing a blend of platitudes and high-leverage, high-risk speculative strategies from the stages of big hotel chains.

They can be forgiven for being tacky. But not for destroying peoples’ retirements with their shoddy ‘investment’ advice.

Here’s the thing:

Be careful about choosing who you take advice from. This is true in any arena — health, fitness, personal finance, business, real estate, travel. Some teachers are better than others. The slick, sentient-infomercial Scamborghini types offer the most dramatic cautionary example.

But there’s another reason.

Most people who teach or offer advice (on any topic) are good people — great integrity, great heart — but they’re not a good fit.

There’s nothing ‘bad’ or ‘incorrect’ about them; they’re a great fit for someone else. But they hold a philosophy, approach, strategy and framework that’s not right for you.

If you want to learn about index funds, you don’t seek out a day trader.

If you want to learn about asset allocation, you don’t ask the neighbor who’s obsessed with penny stocks.

If you want to learn about financial independence through rental property investing, you don’t seek out the mega-deal, high-leverage, speculative-style instructor.

I made a video about this. You can watch it here.

In the video, I chat about real estate investing, but the big-picture idea applies across topics — including music, art, fitness, cooking, creative writing, nutrition, stock and bond investing, and personal finance 101.

Choose your mentors wisely.

— Paula


Our class, Your First Rental Property, is an 11-week online training that walks you, A-thru-Z, through everything you need to know as a beginner rental property investor. Learn more here, where you can also check out stories from our students and alumni.

If you want to prepare for investing in real estate this year, join our VIP waitlist, where you’ll get a 7-day sneak peek of the material inside the course.

We open enrollment twice a year – once in the spring, and once in the fall. Our students have lifetime access to the course, which includes quizzes, worksheets, spreadsheets, templates, forums, and peer support from small accountability groups.

Our students benefit from learning from our Teachers Assistants (TA’s), all of whom are alumni from our course and successful real estate investors. Students can also bring their questions to me directly during our live Q&A Office Hours calls on Zoom. We will hold Office Hours twice weekly during the 11 weeks, and students and alumni are welcome for life.


P.S. Got questions?

“I’m an out-of-state investor.” “I’m interested in Airbnb.” “I’m househacking.”

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“Wait … what’s inside the course, exactly?”

This video walks you through everything.

If you’re interested, get more information and join our VIP waitlist here!

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Apache is functioning normally

May 25, 2023 by Brett Tams

Investing in real estate is always considered one of the best ways to build wealth.

Unfortunately, there are some drawbacks that make traditional real estate investments (like owning rental properties) challenging and prevent most people from trying.

The most significant challenges to owning properties are:

  • Capital – Many people who are interested in real investing don’t have the money needed for a down payment on a rental property.
  • Time requirements – Owning and managing rental properties can be a major commitment.
Passive Income Through Real Estate Crowdfunding

There are some ways to invest in real estate, however, that can produce passive income without the need to manage properties or deal with tenants.

In recent years, the growth of real estate crowdfunding has opened up many new opportunities for the average investor who wants to branch out into real estate.

Real Estate Crowdfunding: A Quick Overview

Real estate crowdfunding makes it possible for smaller investors to benefit from real estate without the need to deal with property management or many of the other issues that come along with being a landlord.

Real estate crowdfunding began with the JOBS Act of 2012, and in the past several years, more than 100 different websites/platforms have entered the industry.

Although many different companies fall under the classification of real estate crowdfunding, there are several different approaches and some major differences that you need to be aware of if you are considering investing.

What all real estate crowdfunding platforms have in common is the fact that they allow individual investors to participate in larger real estate deals without the need to manage the property.

Some platforms allow you to invest in specific properties or projects, while others allow you to invest in a portfolio of properties. Some focus on commercial properties or apartment buildings, and others focus on smaller residential properties.

As an investor, there is a lot to like about the opportunities that are available. If you’re looking for an investment that has the capability to produce passive income, real estate crowdfunding is something that you should consider. Regardless of whether you are looking for an investment that can produce income during retirement or whether you want to reinvest to grow your wealth faster, there is a lot to like.

For a much more detailed look, see Kevin’s article Ultimate Guide to Real Estate Crowdfunding: What it is and Where Can I Invest?

Aren’t Rental Properties Sources of Passive Income?

Rental Properties As a Source Of Passive Income

With all of the talk about passive income, you may be wondering why crowdfunding would be preferable over directly owning rental properties. After all, owning rental properties is often listed as a great way to earn passive income.

While owning rental properties is a proven and time-tested way to build wealth, it can take a significant commitment in terms of your time and attention.

As a landlord, you may not always need to put in a lot of time, but you’ll have very little control over when you are needed.

If a tenant has a plumbing leak on a holiday weekend, you’re probably the first person they will call. You’re responsible for everything that needs to be done with the property, and that can be a big responsibility.

On top of maintenance and repairs, you may also have to deal with tenants who pay late, or not at all. Chasing down late payments or working through an eviction process can take a lot of your time.

Yes, it’s possible to hire a property manager to handle a lot of the details, but that will cut into your profit and it won’t totally remove the responsibility from yourself.

On the other hand, crowdfunding offers a truly passive way for you to invest in real estate.

Andrew Herrig owns multiple rental properties and also invests through real estate crowdfunding platforms (he also blogs at Wealthy Nickel). On the subject of passive income from real estate, Andrew dispels the notion of the truly passive rental property.

“As a real estate investor who owns a portfolio of rental properties, I also put some of my money into real estate crowdfunding. While many people talk about rentals as being a passive investment, that has not been my experience. Even if you have a property manager, you still have to manage the manager and get involved in making decisions on placing tenants or paying for repairs or upgrades. Real estate crowdfunding provides truly passive income (aside from the due diligence you need to do on the deal sponsor). I am constantly evaluating my real estate portfolio to see where it makes sense to convert an active rental property investment into a passive crowdfunding investment. If in a particular scenario I can get similar returns from crowdfunding, it’s a no-brainer to invest there instead.”

Generating Passive Income from Crowdfunding

If you’re intrigued by the possibilities, you may be wondering how to get started.

Here is a look at the steps you can take to start generating passive income through real estate crowdfunding.

generating passive income from crowdfunded real estate

Are You An Accredited Investor?

The first thing you need to know is, are you an accredited investor?

To qualify as an accredited investor you will need to have a net worth of at least $1 million (excluding your primary residence), or you’ll need an income of at least $200,000 (for single filers) or $300,000 (for joint filers) for the past two years.

If you don’t meet those qualifications, don’t worry. Some real estate crowdfunding platforms are only available to accredited investors, but others are available to all investors. Some have options for accredited investors and non-accredited investors alike.

Accredited investors will definitely have more options (see our table below), but there are plenty of good options that are accessible to anyone. But it’s important to know if you qualify as an accredited investor, because it will determine what options are available to you.

Options For Non-Accredited Investors

For those who are not accredited, some of the best options include:

Fundrise

Invest in a portfolio of properties through Fundrise. You can choose their Starter Portfolio, or one of their three Core Plans: Supplemental Income, Balanced Investing, or Long-Term Growth. The Core Plans allow you to choose an approach that fits well with your own situation and needs. Read our full Fundrise review here.

Earn Passive Income In Real Estate By Using Fundrise

DiversyFund

DiversyFund provides investors with the ability to diversify some of their holdings into commercial real estate, while the $500 minimum investment for non-accredited investors is a definite plus.

DiversyFund is different from most other real estate crowdfunding platforms in that their REIT actually owns the properties held in the trust. They buy, manage – and when necessary – sell properties in the trust.

You can expect a 7% preferred return before DiversyFund receives any profit split. Then investors earn 65% of the cash flow profits above the 7%. Once investors have made 12% per year, any remaining profits are split 50/50 between investors and DiversyFund.

DiversyFund Real Estate Investing for passive income

Read our full DiversyFund review here.

Modiv

Modiv currently offers two different REITs that are open to all investors. Read our full Modiv review here.

Modiv real estate investing

Groundfloor

Groundfloor is one of the few crowdfunding platforms that is open to non-accredited investors and facilitates investment in specific properties. The investments through Groundfloor are short-term (usually 6-12 months) and return 5% – 25% interest. The investments are used by flippers and you’ll be able to pick the exact projects that you want to invest in.

Real Estate Investing With Groundfloor

How Do You Want To Invest?

Do you want to invest in a portfolio of properties, or do you prefer to invest in individual properties that you handpick?

By investing in a portfolio of properties you can get started very quickly without the need to vet or research the individual properties or projects. You can create an account, fund it, and start investing right away. It’s a low-maintenance, long-term investment that is ideal for generating passive income. An example would be investing in any of the options offered by Fundrise (their Starter Portfolio or any of their Core Plans).

The other option is to choose the specific properties and projects that you want to invest in. If you are not an accredited investor, Groundfloor is basically your only option for picking individual properties, and they focus only on flips of residential properties. If you’re an accredited investor, you’ll have far more options here. For example, you could use PeerStreet to invest in individual loans or use EquityMultiple to invest in large commercial or residential properties. You can use FarmTogether to invest in tracts of farmland, a surprisingly good investment over the past 50 years.

Once you know if you are an accredited investor and you know the type of investment you want to make, you can quickly narrow down the possibilities and find the best investment for you.

How Much Are You Willing/Able To Invest?

Each platform will have specific requirements related to minimum investments. In some cases, the minimum can vary based on the specific investment that you choose.

Most of the platforms that allow investments from non-accredited investors have lower minimums in order to make the investments realistic for more people. But many of the platforms that are open only to accredited investors will have minimum investments in the $1,000 – $10,000 range.

If you see high minimum investments at a few platforms, don’t be discouraged. Here are the minimums at some of the top platforms:

Do You Want To Reinvest Dividends?

Although we’re talking about passive income, you could choose to reinvest. If you don’t currently need the money, reinvesting will allow your investment to grow much faster and larger.

This is especially easy if you are using the portfolio approach. For example, Fundrise investors have a setting in the dashboard that allows you to easily control whether your dividends are paid out to you as cash or reinvested. You can set it to reinvest and then easily change it in the future whenever you want.

If you are investing in individual properties or projects, you probably won’t have the option to reinvest automatically. Instead, you’ll need to choose new investments to invest in.

Recommendations For Getting Started

If you’re new to crowdfunding or real estate investing in general, the portfolio approach is definitely the easiest way to get started (it’s also the option that is most accessible to non-accredited investors).

You’ll need to choose the crowdfunding platform that you want to invest with, make sure you can meet the minimum investment, create your account, and fund it.

This is a long-term type of investment and you need to be aware that your investment is unlikely to be liquid. Be sure to check the details related to liquidity before you invest, but in general, this is not an appropriate investment if you might need the money within the next few years.

Invest In A Portfolio Of Properties

A few recommendations if you want to take the portfolio approach:

Invest in a portfolio or real estate properties with Fundrise

Fundrise – Fundrise is a great entry point to the world of real estate crowdfunding. It’s open to all investors, has a relatively low minimum investment of $500 (for the Starter Portfolio – the Core Plans have a minimum investment of $1,000), and doesn’t require you to vet any specific properties or projects.

real estate crowdfunding with Realty Mogul

RealtyMogul – RealtyMogul offers a few different types of investments. Accredited investors are able to invest in individual properties, but they also offer public, non-traded REITs that are open to non-accredited investors.

Modiv – Modiv also offers anyone the opportunity to invest in REITs, making it a quick and easy way to start.

Invest In Individual Properties

If you prefer to invest in individual properties, here are a few excellent options:

Groundfloor – As was mentioned earlier, Groundfloor is pretty much the only platform that allows non-accredited investors the option to invest in individual properties.

Accredited investors investing in  private real estate loans with PeerStreet

PeerStreet – PeerStreet is a marketplace where accredited investors can invest in private real estate loans. You can create an account and view the available investments.

FarmTogether – is a crowdfunding platform that invests exclusively in farmland. Farmland has been one of the best and most reliable investments over the past 50 years. They shoot for an annualized investment return of between 8% and 15%.

Other Ways to Invest in Real Estate Passively

Although crowdfunding offers a great way to generate passive income from real estate, there are a few other options that offer many of the same benefits without the need to manage the property yourself.

Public REITs

Public REITs can either be traded or non-traded. Publically traded REITs are probably the most liquid of all real estate investments since they can be bought or sold at any time, however, the returns tend to be lower.

Public non-traded REITs meet the requirements of the SEC, but they are not traded on an exchange, which means they tend to be illiquid.

Some of the crowdfunding platforms that were mentioned in this article offer REITs, but you can also invest in REITs in many other ways. If you have an existing account with Vanguard or Fidelity, you can very easily start investing in REITs.

Mutual Funds and ETFs

While REITs invest in real estate, REIT ETFs invest in multiple REITs. There are also many mutual funds that focus on real estate. Like other mutual funds and ETFs, these investments offer liquidity, so you’re not looked into a long-term investment.

Crowdfunding Site Fees Account Minimum Accredited Investor Review
* Groundfloor None $10 No Review
* DiversyFund None $500 No Review
* Fundrise 1%/year $500 No Review
* RealtyMogul 0.30% – 0.50%/year $5,000 No Review
* stREITwise 3% up front fee, 2% annual management fee. $1,000 No Review
* FarmTogether Intake fee of between 0.5% and 1.0%. 1% annual management fee. $10,000 Yes Review
CrowdStreet None $10,000 Yes Review
Yieldstreet 1-4%/year $2500 No
Equity Multiple 0.5% service charge + 10% of all profits $5,000 Yes Review
PeerStreet 0.25% – 1.0% setup fee $1,000 Yes Review
Sharestates 0-2% setup fee $1,000 Yes
Patch of Land 0-3% of loan total $1,000 Yes
Modiv None $1000 Yes Review
RealCrowd None $5,000 Yes
Cadre Intake fee of between 1-3%. 1.5-2% annual management fee. $25,000 Yes Review

How To Create Passive Income With Real Estate Crowdfunding

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Apache is functioning normally

May 24, 2023 by Brett Tams

Welcome back to the show, everybody! I’m excited to have my buddy, Rafael Cortez, back on the show! Rafael is an amazing guy and a scale master! He is a coach who helps people scale with his systems and processes. Today, we will talk about mindset, self-doubt, fear of change, fear of success, and self-sabotage that many business owners face today. Let’s get started!

Mike: [00:00:00] Hey everybody. Welcome back to the show. I’m really excited, uh, to have my buddy Raphael Cortez on. He’s been on the show a while back. It’s been over a year. We were just talking about it, it seemed like two months, but it’s been over a year and we’ve been spending a bunch of time together lately, over the past.

Mike: This is like three weeks in a row that we’re hanging out. Uh, of course the last couple weeks have been in person. I was out in Phoenix, and you were here at Investor Fuel in Dallas. Raphael’s just an amazing guy. And honestly, for as much as I talk about scale and trying to help people scale, like he’s, he’s a scale master at systems and processes.

Mike: And in fact, today we’re gonna be talking about mindset stuff because he’s a coach that helps people scale as well. And we were talking about what we’re gonna talk about and. And just had some great discussions on just the mental side of this business. And I think, um, if you’ve been in the business for a while, and even if you’ve been scaled up, it’s what a weird time to just live in America.

Mike: What a weird time to be running a business. And so all of our mindsets are a little bit screwed up of, you know, what’s, what’s up and what’s down, right? So that’s what we’re gonna talk about. Today, welcome to Real Estate Investing Secrets. [00:01:00] We’re all looking for freedom and the opportunity to live better, more fulfilling lives.

Mike: But most of us, were trained our entire lives to work for someone else to chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom? My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your life.

Mike: And the world around you, and to enable you to turn your dreams of financial freedom into a reality. My name is Mike Hambright from Flip nerd.com, and your questions get answered here on the Real Estate Investing Secrets show.

Mike: Raphael. What’s up buddy?

Rafael: What’s going on man? Thanks for having me back. It’s an honor, dude.

Mike: Yeah. Always, always good to hang out with you. We’ve been hanging out a ton. Uh, as you know, uh, you guys can see Raphael’s office there. He’s got the sweetest office I’ve ever, I’ve ever been, been in. And I was out there a couple weeks ago and I was like jealous of, uh, this office. So you’ll pivot on the camera.

Mike: There’s the office. Yeah. He is got like, It’s like a museum. He’s got [00:02:00] motorcycles set up in there and punching bags and just like, it’s a total like man cave, right? Yeah.

Rafael: You know, the stuff that I can’t get away with at home, I guess they come in and do it at the office.

Mike: That’s right. Yeah. You gotta, yeah.

Mike: You got a place there. So, uh, hey, tell us real fast, tell us about a little bit about your background for those that, that don’t know you yet.

Rafael: Um, thank you again. My name’s Rafael Cortes. I’m based out of Phoenix, um, um, Arizona. So I, this is my main market. I do a lot of wholesale. I to fix and flip. I’ve been a real estate since 2009.

Rafael: Um, I own a brokerage here in town as well, so we do traditional stuff. So everything when it comes to, to real estate investments. I mean, we tried it all, you know, from the residential, the commercial, the wholesale investments, creative financing and all of that stuff in between, right. Um, by career. I, uh, I’m a, I’m an organizational psychologist, so my thing is, is, uh, you know, it’s people and systems, right.

Rafael: Uh, which plays right into the, the topic that we’re gonna be covering today. Yeah. Um, but yeah, I mean, basically what I do is I put people, uh, and, and systems together and make ’em work, you know, in, in a symbiotic way [00:03:00] for. For the sake of business and operations. I mean, that’s mainly, you know, one of my biggest, uh, spaces

Mike: where, where Yeah.

Mike: Yeah. And we were talking Right, right, right. Before we, uh, kind of hit record here, we were talking about just this idea of self sabotage and, and I know that I’ve done it. There’s areas in my life that I do something and I, and I look back on it and I’m like, why did I do that? Like, why did, why did I make that as hard?

Mike: As I did, and it didn’t need to be. And I think there’s a lot of us that do some element of this, and it’s like, it’s deep in your soul as to why that’s happening. Right. It doesn’t make sense. It’s not like you’re consciously thinking about it, but it’s like you’re aiming at something and you just let stuff get in the way that shouldn’t.

Mike: Right. And so, uh, have you, you, you’ve coached a lot of people too. Ha, have you seen some of that where people just Oh, sabotage their own results? Right. It could be that you don’t think they’re worthy. Or it could be, they don’t even know why they’re doing it. Right. So what are your thoughts on that?

Rafael: Every, every single day, man, I see it every single day.

Rafael: And not just from students, right? I ha you know, [00:04:00] thankfully, thank God I have a lot of students throughout the country. But, but I mean, we have, we have default modes of behavior psychologically, right? There’s stuff that we just go back to whenever we get stressed. If you’re, for example, you’re doing wholesaling and you’re cold calling and then you get rejected, you know, 10 times and you feel demoralized, you’re gonna build stress, right?

Rafael: And, and, um, we go back to our default actions and a lot of that stuff is, is, you know, tends to be negative. Why? Because we beat ourselves up as we’re growing up for the stuff that we couldn’t accomplish. Right? And we didn’t get first place on that race. I mean, we feel bad as we were little if we sucked at baseball, right?

Rafael: It was just wasn’t in our lane. And I’m using personal examples here, so, So we, we feel, we start feeling like, like we’re not, you know, we’re not enough, right? Um, but what happens is that we start to get programmed to respond that way to new challenges. Um, and, and as we, you know, go through life, even if we’re really good at something, uh, we’re, we’re gonna forget, you know, we’re gonna lose the awareness of it and go back to default thinking, default modes.[00:05:00]

Rafael: And, uh, and a lot of times that’s what happens, right? You see people just, you know, staying in flow and then start to become fearful, uh, of losing it all. Or losing the, uh, you know, the, um, The, the groove or, or they get to a point where they start to hit this glass ceiling and, um, start doing things. Uh, in terms of self-sabotage, that may not necessarily always look like self-sabotage, right?

Rafael: It’s not, it doesn’t always look bad. So it’s not, you know, always depressing or anything. But, um, you know that you’re gonna take a vacation in the middle of, uh, a time that you shouldn’t be taking a vacation, right? So because of, of where you were at in, in a process, in, in a deal transaction or whatever.

Rafael: But we’ll start doing that kind of stuff. Um, Almost in pursuit of that instant gratification when we know it’s not the best course of action at that time. And it’s happened to me a bunch of times in the past. Yeah. And, and what happens is that we circle back, like we come back to that, you know, point of, of beginning, um, where we feel comfortable.

Rafael: Like at the end of the day, we want to go back to that space that we know if we feel, you know, quote unquote comfortable. We’re very familiar with building [00:06:00] from the ground up whenever we get to a point of success that scares us. That’s gonna demand a higher, a better version of us. Um, you know, we start, I don’t know, add a zero to your deals, right?

Rafael: Like, that’s gonna make you nervous. Yeah. Um, it, it’s, it’s, it’s incredible how far we will go to, uh, just reset that and come back to that comfort zone.

Mike: And you know what, what I think exacerbates all that is that a lot of people that are watching us or seeing on social media or whatever, they’re, I don’t mean this in a negative way, they’re just operating.

Mike: If you’re a high performer, like most people are further back than you are. And so you almost like feel like, so like you said, nobody’s gonna say anything. Because most people already think you’re way ahead of them, so they’re not even, so you won’t feel bad if you are not successful because many aren’t at that level, right?

Mike: Yeah. So it kind of holds you back or you pull yourself back to, uh, to a lower level than what you could achieve. You know? And it would be different if you were, for example, you, you were just at investor fuel, [00:07:00] right? So if you’re in a network of people that are high achievers, like you might hit this, uh, ceiling, which is just in your head probably right?

Mike: But if you were around a different group of people that were operating at a way higher level, you’d be able to blow past that. No problem. There’s just this, like you said, a glass ceiling, and it’s really a fake glass ceiling. It’s not even real. You just hit this thing and you just get stuck because that is a.

Mike: You know, the network you have right now, or the people you’ve surrounded yourself with, or the, the mindset of this is, I, I’m ahead of everybody else. Why do I need to keep pushing further? But if you got around another circle that would help you push to another level, you would be at the starting line still maybe,

Rafael: right?

Rafael: Yeah, no, absolutely. And you know, what happens to, I mean, we’d be,

Mike: we’d be, I didn’t say that very succinctly, but I think, uh, yeah,

Rafael: no, no, I get, I get the, uh, I get the, the point. Um, and what happens too is that, I mean, we be, as, as you know, time goes on, we become creatures of habit. And, uh, and we want to, we wanna be familiar with, with our surroundings.

Rafael: We want to be familiar with, you know, with the stuff that, that, you know, that surround us on a regular [00:08:00] basis, right? And we’ll fight for that, but we’ll also fight to be, right. So if you’re wiring, if you’re psyche is, is telling you that you have a, a, i, I don’t know, call it a financial thermostat, right? I’m gonna be able to hit this number and that number is just a big number for me.

Rafael: And it feels scary. It feels like you’re out there. That may be 50 K for some people, a hundred K for some people, a million for other people. Right, right. But we have this financial thermostat. I mean, to, to paint an example on, on how we kind of reset psychologically when we get around that area. Right.

Rafael: We’ll, we’ll start to roll out self-sabotage because subconsciously, Um, success can also create fear, right? We, again, it’s gonna demand a higher version of yourself. It’s gonna demand more commitment, it’s gonna demand you putting yourself in a, in a, in a space where maybe you don’t control everything.

Rafael: Maybe you don’t know all the ins and outs and you’re not as comfortable, right? Um, I remember it took me, my first company, took me eight years to build that thing up, and, and I mean, I got to a point where I was like, you know, fishing, water, right? Swimming in that particular business, transportation, [00:09:00] and I was doing, Really, really well.

Rafael: And as soon as I jumped into real estate, like I started being all kinds of, of, uh, of, uh, you know, risk averse and, and, you know, doubt started creeping in. And my, my, just, my character and my behavior just absolutely changed from that confident, you know, self and entrepreneur, you know, person that I was in that industry to this other one that was like, what the hell am I doing?

Rafael: What is going on? Right. Right. Um, but that’s because, you know, that landscape is just, we don’t know it yet. And as if, if we make the intentional, if we become intentional about moving forward, and, and I think, I think, Mike, what happens to you is a lot of times we don’t have a clear vision. We don’t have a, a clear path of where we, uh, we want to go.

Rafael: Uh, And that creates a lot of noise, right? It creates a lot of noise. And anything that comes along our, you know, uh, our path is gonna be a good option because we don’t have anything set in, in, um, in, in, you know, as a destination, right? And it doesn’t mean that it’s gonna be the exact, you know, same path that you imagined, you’re gonna walk that path.

Rafael: Maybe you’re gonna have to pivot [00:10:00] that a couple of times and whatnot. But you’re, you’re gonna have a, a, I call it a lighthouse. Right. You have, you’re gonna have this beacon that you, that you want to get to. Right. And we have that and we have a clear, uh, perspective on what that looks like. Everything that we do from here to there Right.

Rafael: Uh, becomes, starts to, to get in alignment. Yeah. And, and I think that’s one of the biggest things because we’ll get, we’ll get, um, one of the biggest things that I see in, in self-sabotage for example, is, is shiny object central. Like, oh yeah, I’m doing this strategy, but I saw that on social media, so I’m gonna move out and, and then everything that’s working right now, I’m gonna set it aside.

Rafael: I’m gonna go that because that looks, you know, sexy. Yeah. Um, and, and what happens? I mean, you’re moving your entire thing because you don’t have a stronghold on that final, you know, uh, or ultimate vision that you wanna, you know, you wanna accomplish. Right.

Mike: Yeah. And I think the other thing that happens is there’s this saying, I’ve actually, I don’t know where I heard this from, uh, but I’ve, I’ve used it a lot lately that you can hustle your way to seven figures, but not to eight.

Mike: Yeah. And I think what happens is once [00:11:00] you, like, this is gonna sound like ego driven, right? But I think like I could show anybody how to. This, and this is a big deal for people that are in a W2 job. I could show anybody how to create a business that’s a million dollars a year. Like getting to 10 is way harder, right?

Mike: Oh yeah. So what I think happens is people get up to that level where they have a, a nice, like seven figure business and they get a little bit bored and they, and they like the, um, the adrenaline. From being able to hustle your way to create something else, because that appears to be easier to do than to go from, let’s just say, get a two or $3 million year business to 10, right?

Mike: Be because they don’t have the skill, like they got the skillset to go start over and create another two or $3 million business, but they don’t have the skillset and they’re, they’re not willing to put in the effort or whatever it is the, the investment or whatever to take that three to 10, which honestly would be easier.

Mike: Um, But in their mind, they just think, well, because it’s a different, it’s a different approach. It’s like [00:12:00] management of resources versus hustle. They can go hustle and do something else, and they know how to do that, but they don’t have the skillset yet to be a manager and a good steward of taking on investment, whatever it takes you to get from three to 10, but that would probably ultimately give you the freedom that you want, right?

Mike: Because if you’re going from three to 10 million, like if you’re hustling your way to low seven figure businesses, And not to say that that doesn’t provide a good lifestyle. You don’t have the resources to have a robust team. Right? And this is industry specific. But if you, if you, you know, if you have a two or 3 million real estate business, you’re probably still doing a lot of stuff.

Mike: Like you don’t have a huge bench of, uh, a team. But if you went from three to 10, You would have a coo, you would have a bunch of resources to pay for things. Right.

Rafael: I think it’s really tough to go from three to 10 without having that stuff in place. Yeah. You

Mike: can’t. Yeah, that’s what I’m saying. So you just fall back on, well, I could go start like doing Yeah, something else.

Mike: Flipping cars, right? And you could hustle your way to, uh, a couple million dollar business again, [00:13:00] but it’s not gonna give you that freedom that you probably

Rafael: want. And I, I think also what happens too is that that fear of failure becomes a lot more, you know, a lot more real. Right? Because I mean, and, and I, I love bootstrap scenarios.

Rafael: People who just, you know, they say, okay, I want, I, I wanna improve my life. I want to get better. I mean, that’s, that’s really my passion is coaching bootstraps and, you know, bootstrap entrepreneurs, uh, because I’m one of those, right. But it’s, it’s, uh, I feel like. At the beginning, you’re hungry. You are, you’re okay.

Rafael: Well, I got, you know, this is, this is there, there’s nowhere else to go but up, right? Right. I’m gonna climb this, climb this mountain. We’re doing everything it takes, uh, to get, you know, to this point, the fear, uh, of. Of, uh, failure is not really, you know, it’s not that predominant. Why? Because we’re building stuff and then you get to a point where you have, you know, stuff you achieved, uh, you know, a few things and yeah.

Rafael: Now maybe you have a network, you have a decent business, you have employees and all that stuff, and then the fear becomes a lot more real. Yeah. Um, and I think that’s where, where, where people just kind of pull back. [00:14:00] A lot of that doubt starts to creep in. Yeah. Back, back into your, your psyche. Uh, there’s a lot of doubt when we begin.

Rafael: Right. And a lot of stuff that holds us back from taking action. Um, but at the end of the day, like, I think it’s, it’s all a cycle. If we don’t, if we’re not aware of how we react to our own, uh, psychological triggers, right? That’s one. And then, um, we don’t know how to navigate through them. Like we’re gonna get stuck every single time.

Rafael: Um, that fear and that uncertainty, um, that maybe sense of un unworthiness comes in. Like, who am I to be making 10 mil, 10 mil a year? Right. Right. To be, you know, part of this group of elite people. You know, that that’s, that’s a long process. Yeah, it just

Mike: made me think of this analogy and, uh, as a guy, and it’s, you know, we, of course we have women that listen to, but everybody, I’ll appreciate this, we all have those friends that will never get married because they just, they date somebody and it gets to a certain level and they just wanna start over.

Mike: Like, and the truth is, is things get a little tough. [00:15:00] Things get a little more serious, you know, now you gotta step up and they somehow sabotage it and they just like start over with dating somebody else again. And, you know, they’re like, 40, 50 years old and probably have never been married and probably never will, because it’s just easy for them to go hustle their way to.

Mike: Uh, a new relationship cuz there’s no real responsibilities, you know, and they just sabotage themselves. Right. It’s like that in business too, I think. Yeah. People And I just thought of this analogy and I hopefully, uh, uh, one, the one really good friend of mine, uh, that uh, fits exactly what I just said, isn’t listening to this cuz he’ll be like, you’re talking about me.

Mike: But it’s like, things get hard things, it, it’s hard to stay married, right? It’s hard and it’s hard to commit to. A higher level of business because there are more stakes. There’s more, more to lose. There’s more people that you’re responsible for. But I think if when people are starting off, that’s where everybody says they want to get to.

Mike: But then when you start to get to that point, like you said, sometimes you start questioning, am I worthy of this? Am I capable of this? And the truth [00:16:00] is, nobody came out of the womb. Being a c e o of a 10 million company or having that skillset, you have to learn those things. You have to get coaching, you have to join masterminds, you have to read a lot of books.

Mike: Like you have to lose a lot and fail and fail your way forward and learn from those things.

Rafael: Yeah, a hundred percent. Man, we have to get out of our own heads. Right? It’s, it’s, um, That quiet place can be a scary place sometimes. Yeah. I’m saying don’t ever be there. We have to be there to contemplate, you know, come, you know, come up with original ideas and, and, and kind of find ourselves who we truly are.

Rafael: Right. Um, but also we spend too much time in, in, in that quiet place and we’re not, uh, You know, tapping into different perspectives, reaching it out, you know, to people who are going through, uh, the journey that we’re looking to go in, into. Um, we’re missing out on big opportunities. I mean, we’re, I mean, I, I learned from you and, and, and, uh, and, uh, you know, everybody else around us on a, on a regular basis.

Rafael: It’s, it’s just, it opens up. Perspective. And once we have that seed right, it’s, it’s really hard to [00:17:00] lie to ourselves because, you know, somebody else has done it, you know, it’s possible. You have the, uh, the, uh, the, the proof of concept, although it’s not, you know, it’s not mine yet. I see it happening on a regular basis.

Rafael: Now it becomes a matter. Yeah. Cool. Am I gonna commit to this thing? Um, and am I committed or am I interested in really changing the, the, the, the lifestyle that I have? Am I committed or am I interested in becoming an entrepreneur? Uh, if I’m interested, dude, anything, uh, a new Netflix series is gonna throw me off.

Rafael: The, the, you know, the wagon, right? Yeah. Uh, anything is gonna, it is gonna, you know, create, um, distance between me and my goal. If I’m committed, though, uh, there’s gonna, it is gonna take a lot of force. To break me from that vision, right? Yeah. To throw me off the path. Um, again, sometimes we have to come in and pivot if the market is weird and we have to navigate stuff.

Rafael: Okay, cool. Go back to the drawing board, analyze the basics. See what you know, see what’s up. See if you need to pivot into something else. But don’t lose sight of that one thing that lights you up in the morning. Every morning. [00:18:00] I guarantee you have this every morning. Because I mean, achievers and, and, and, you know, the most successful people that I know, um, wake up with this fire in the gut, and it’s almost an excitement.

Rafael: We don’t wake up in the morning like, Ugh, I gotta go to work again. Ugh. Now we wake up and it’s like, shit, what amazing stuff’s gonna happen? Right? What, you know, what connections am I, am I gonna make, what opportunities are gonna come up? How am I gonna, you know, help somebody improve their life? How’s somebody else gonna improve my life?

Rafael: Right? So I think a lot of that, you know, has to be, has to be adopted. And it took a while for me to just kind of sit with that kind of stuff, right? But those are internal conversations that we have. If we don’t get out of the um, um, Of that, you know, quiet space and, and tap into, again, different groups, different perspectives, even if you have a, a best friend or just a friend or an acquaintance or something.

Rafael: I mean, make it a habit, uh, of, you know, sitting down for lunch and then catching up. Okay, where are you at? You know, how are you feeling? We have a men’s group, dude. Uh, like it’s, it’s, it’s, it used to be, you know, weird [00:19:00] to have a men’s group, right? Because guys get together and then they, they talk about, you know, how they’re feeling, what their mindset is.

Rafael: Uh, all these guys are crushing it, right? And we get together once a month. And then we just do a kinda like a touch, you know, we’re touching base, you know, how are you doing? It’s a group of about 12 of us. And I mean, it’s a big, big support thing, right? That, you know, plays right into, you know, the power of masterminds.

Rafael: It’s the power of just getting out of our own heads and, and sometimes a simple conversation is gonna, is gonna reset your, your ambition. It’s gonna reset

Mike: your Yeah, that’s great. Yeah. We talk about that in investor fuel. It’s kind of a play on words like, come to recharge your batteries, right? It’s like, yeah, they kinda can get reinvigorated and, and to see what’s possible too.

Mike: If you’re in the right circle and if you’re the biggest guy in the circle. Or, or woman, like, that’s not, that’s not ideal like you always want to be. You’d be, you’d be better off being the smallest person in that circle versus the biggest ride. I’ll give you a perfect story for this. This is, uh, really an eye-opener for me yesterday.

Mike: I, I love what I do and I, I love what I get to [00:20:00] do and I love all the freedoms that I have, but. Long story short, I went to, uh, I met my wife in grad school. We went to a, one of the, you know, top 20 or so n b a programs in the country. Great program, you know, and I think there’s a bunch of people that are kind of stuck in middle management.

Mike: And I, in the past I’ve like, you know, I have some friends, I’m like, man, I’m so much better off than where they are. I kind of stuck at, you know, middle management for some job, whatever. I, I, and, and I’ve said that a few times or I’ve thought that, and then yesterday there’s a guy that I was pretty good friends with in.

Mike: Our program, which I’m gonna date myself here, we actually have our 20 year reunion coming up, uh, uh, in September. And there’s a Facebook group for our class. And there’s a guy in there that I was pretty good friends with, I haven’t talked to in honestly, 20 years since we graduated. And I just found out for the past two years.

Mike: He’s, he’s the c e o of a 10.5 billion, uh, oil company. Wow. And I’m like, You know, and he is a couple years younger than me. I’m like, damn. Like, you know, just thinking what’s possible. Like this guy that I used to, he was in my small [00:21:00] group, so we studied together like every day for a couple years, for the most part is now a C E O of a 10 billion company.

Mike: Right? Yeah. And any of us that are listening to this can do that too. And for him, you know, and I haven’t talked to him again in 20 years, but he’s got issues that he’s dealing with, I’m sure. But it’s the, some of the same stuff. If you let the fear of success, the fear of change, Thinking you’re not worthy.

Mike: All that stuff get in the way. Like he wouldn’t be there either. Right? So any of us can achieve bigger things. And sometimes it, my point of saying all this is, it’s just a matter of believing you can do it and being around people that are doing it and just keep pushing it to the next

Rafael: level. Right? A hundred percent.

Rafael: Man. It’s the, uh, like one thing that I, that I, this is how I gauge whether or not I’m in the right room if I feel inadequate. Hmm. Yeah. But I have a feeling of inadequacy. And I’m, it’s almost, I mean, I don’t wanna say intimidation. But it’s like, oh, okay, cool. If I have to think about how can I bring value to this group, if I walk into a group and okay, I know automatically, you know what I’m gonna do, and I, [00:22:00] you know, I have a, a confidence of a thousand walking into the room, more than likely it’s not the right room.

Rafael: Right. Uh, for me. Right. It, it’s like I want to feel inadequate. Yeah. I want to feel like, okay, cool. There’s, there’re like, I have to stretch myself to really put myself in the line here. Uh, because these people are crushing it. These people are, are, you know, I’m learning from them. So I have to bring my, you know, my, my higher and best version, uh, uh, you know, forward, right?

Rafael: So, yeah. So it’s, it’s just kind of, uh, you know, a way of, of looking at things. Um, so I, everybody listening out there, I suggest you start looking at, at events, uh, real estate investor associations, at meetups, at groups. I mean, if you don’t have one in your, in your circle, in your area, I mean, put one together.

Rafael: You know, start scouting, you know, get five, you know, people that you feel are like, you know, top level players, they’re committed. Get ’em into a room. I’m telling you, magic will happen. Like that’s the first thing to get out of that funky mindset that we, you sometimes get bogged down with.

Mike: Yep. I know both of us now, coincidentally, the last two weeks, I came out, uh, and spoke at [00:23:00] you.

Mike: You had a group gathering some amazing people there. I think you had one that night, you had like 60 or 70 people in your office there. Yeah, something like that. And then you came to my Investor Fuel event, which is, you know, is a pretty large event, native event. I love that. I think both of us really believe in the power of, uh, community so much that we’re community creators, right?

Mike: And so, That’s good. That’s a good tip. So with the rest of our time here, maybe you could talk a little bit about some action items, people and, and everybody’s guilty of this. I mean, I get in my own head and here I am thinking that, you know, not that I have a lot of ego thinking of, look at all this stuff that I’ve created, but then I get it.

Mike: I just told you, a friend of mine that I haven’t talked to in a long time is running a 10 billion company. I’m like, damn, maybe I need to make bigger.

Rafael: Right. He’s and he’s looking at another dude that’s running a hundred million.

Mike: Exactly, exactly. Yeah. There’s no doubt about it. Right. And so, But talk about for folks that are listening to this, that know that they do some self sabotage or know they get in the way of their own success, which probably everybody listening to this does at some level.

Mike: Let’s talk about some action items, some things that they can go [00:24:00] apply to, uh,

Rafael: improve. Um, I, I would, I would call, you know, call everybody out to focus on two things. One is gonna be clarity and, and the other one is gonna be deciding whether you are committed to something or you’re interested in something.

Rafael: Okay. Um, so get clear about whatever that vision looks like. I mean, you, one of the things that I do on a regular, I mean, I, I dunno, you probably saw me carrying this around at the, at the, at the Investor film Mastermind. Uh, but I carry, I, I always carry a notebook. I’m always taking notes. Yeah. I take time to journal, journal.

Rafael: For me, it’s, it’s a mind dump. So I have this mind dump exercise that I do on a daily basis. You know, what happened yesterday? I have a gratitude, you know, section in there and it’s just me taking 20, 30 minutes in the morning when I, when I woke up and I’m fresh. Um, to, you know, to give gratitude. It’s really hard to be pessimistic when you’re being grateful about stuff, right?

Rafael: Yeah. So I intentionally line up my day, uh, in the morning that way, right? So I take some, some time, you know, for me just to be in, in my [00:25:00] space and whatnot and kind of quiet my mind, um, going to gratitude, and then I start journaling, okay, what my, what my ideal day would look like. You know, stuff that is lined out, but, uh, lined up.

Rafael: But I never forget about the big picture. Okay, what do I, you know, what do I want to, what, what am I shooting for in three years, right? Um, and then I see myself in that space, and I sit within, you know, at the beginning it can be a little distracting because you’re gonna start thinking about a, you know, a billion other things other than that one vision that you’re trying to kind of shape in your head.

Rafael: But after a while, it starts to become, you know, to become more and more clear. Um, so get clear about where you want to be. I mean, what does that look like? The, you know, what does your office, your work environment, what does it look like, the people around you, who do you wanna be acquainted, you know, with, um, you know, what kind of events do you want to be attending?

Rafael: What kind of spotlight do you want, if any, right? What kind of results you want in your business? So get clear about all that kind of stuff. Then have a, a realistic conversation about where you’re at right now. Like this is a you and you conversation, [00:26:00] um, and get, uh, you know, decide whether you’re interested in creating that, that, uh, Better version of yourself cuz it’s gonna demand a whole other individual.

Rafael: Right. Uh, I won 30 years of my life thinking I was crushing it and then I hit 30 and um, I was like, oh, okay, cool. I mean, I, I, I can do, I can do more. I can actually make an impact on people, but it’s gonna demand a lot more of me. It’s gonna demand a different version. Um, and the. The catalyst for all that to happen was me getting committed to it as opposed to being interested.

Rafael: Uh, and, uh, when we’re interested, it, it’s, it’s easy to just, you know, uh, flake and waffle, right? With, with decision and actions. Um, but if you’re committed and you have a clear outcome on the vision that you want to get to, trust me, you’re gonna figure things out. Uh, you’re gonna figure out, because you’re gonna start brainstorming and you’re gonna start getting, you know, getting obsessive almost about, you know, that particular vision.

Rafael: Right? Yeah. Um, And you’re gonna, you’re, you’re gonna start thinking about who can you know, can I bring into my world? Or [00:27:00] who can I reach out to that maybe can help me get there? And now you start to create, you know, alliances and, and, and connections. And you start it, it’s incredible how the whole thing just kind of starts to unravel and manifest, right?

Rafael: We call it manifestation, but in reality, I think it’s, it’s, it’s, uh, It’s us being intentional about where we wanna get to and then recognizing the resources along the way. Like that’s, that’s a lot of what happens. I mean, in psychology it’s called the reticular activating system, right? We just pay more attention to, to the stuff that we’re interested in.

Rafael: Um, the crazy thing is that we don’t often clarify what we’re interested in. So begin with that.

Mike: Yep. And when I think when you start to vocalize it too in front of other people, your peers or people that you. Respect, then it forces you to start taking different actions. Like, like, man, I, I committed to this.

Mike: And so if you’ve ever done anything like you’ve said, like, Hey, I’m just publicly announcing that I’m gonna lose like 30 pounds in the next six months. It’s like, it’s kind of out there now. Yeah. And it’s some level of accountability, right? Like you’ve, you’ve kind of laid down the gauntlet and people are [00:28:00] gonna ask you about, Hey man, how’s, how’s your, how’s your weight loss going?

Mike: And, uh, you don’t, the last thing you wanna say is like, I haven’t done a damn thing. You know?

Rafael: Exactly. Yeah, exactly. Exactly.

Mike: So, awesome, man. So Raphael, you, you, you, a huge giver in the industry here. If folks want to reach out to you, I know you do a lot of coaching, mainly around helping people scale up their systems and processes and things like that.

Mike: Obviously a lot of mindset stuff too. Like if they wanna reach out to you, you’ve got a podcast, you’ve got all kinds of things going on. Kick ass office, we’ve already talked about that. Uh, aside from dropping your address, they come check out your kick as kick ass office. Where, where would they reach out to you and learn, uh,

Rafael: more.

Rafael: Um, you can find me everywhere on social media. I’m pretty active on Instagram at Raphael Cortes, c e o, uh, that’s on there. I do have a, a, um, I coach, uh, real estate wholesale and I scale real estate wholesale businesses, right? So I, I help, um, students, uh, through a couple of different programs. You can find more about that in re ei wholesaling.com.[00:29:00]

Rafael: You can also download a free course that I have on there, uh, real, uh, the wholesale 1 0 1 course. Uh, it gives you a good breakdown and overview of what the entire process looks like and how you can get to your first deal and that sort of thing. So it’s really good content. Uh, it’s a solid, um, uh, training, um, uh, program that I put together there, and that’s completely free so they can find it at r e i wholesaling.com.

Mike: Awesome. We’ll lot a link down in the show notes here. So thanks, uh, thanks for hanging out with me three weeks in a row now, buddy. Yeah,

Rafael: I know. I know I’m putting my mic fixed.

Mike: We gotta figure out what we’re gonna do, uh, next week, I guess,

Rafael: bro. Name it.

Mike: Yeah. Awesome. Thank you so much, guys. I think, uh, hopefully this, this was timely for you.

Mike: I think there’s a lot of stuff over the past couple years that’s made us kind of question why we do what we do, what’s possible. Like the economy’s fizzling a little bit. There’s some people that are thriving. You know, what makes somebody thrive versus just kind of get by or step back because they say the market’s bad.

Mike: I’m just, it’s, it’s between your ears, right? It’s that mindset that you have of believing in yourself. Off, believing what’s possible and being intentional about what your goals are and just going after [00:30:00] ’em. So hopefully this was a little shot in the arm for you today. Uh, Minnie, thanks to Raphael for sharing some great, uh, insights.

Mike: Thanks buddy. Thank you everybody. Appreciate you bunch. Thanks for joining us again. We’ll see you on the next show. Thanks for listening to today’s show. There are three ways I can help you start or grow your real estate investing business if you’re a new investor In just getting started, the Flip Nerd Investor Coaching Program is the most effective program in America.

Mike: I’ve been coaching and mentoring new real estate investors for 10 years. And my students have literally purchased thousands and thousands of properties. Many of them started with little to no experience at all. Our program is a Paint by Numbers program where we tell you exactly what to do week by week to make sure that you don’t get distracted on your way to results.

Mike: We show you how to build a real business, not just create another job for yourself. New memberships are limited. You can learn more and apply. Or schedule a call with me and my team at [00:31:00] Flip nerd.com/coaching. If you’re an experienced investor doing a minimum of 10 deals a year, up to 500 deals a year or more, or have a multimillion dollar real estate portfolio already, you should check out our powerful Investor Fuel Real Estate Investor Mastermind.

Mike: Over a hundred of the nation’s leading real estate investors are members, and it’s not uncommon for our members. To two to five x their business just from getting around other members At Investor Fuel. At Investor Fuel, each of us are business advisors to one another’s businesses, but we don’t stop at business.

Mike: We focus heavily on becoming better people and living fuller lives. If you’re looking. For fuel for your business or fuel for your life, please check out investor fuel.com. Applications and interviews are required as most investors are not a fit for our community. Please learn [email protected] if you’re not ready for coaching or [00:32:00] masterminds, but eager.

Mike: To start learning more about investing, please join our private Facebook group by visiting footner.com/facebook. New members get access to free training from us right [email protected] And it’s a community. To safely ask your questions, a great place to get started, simply go to flip nerd.com/facebook to request your access today.

Source: flipnerd.com

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