A Guide to Creating Time Freedom and Money Abundance With Real Estate Investing
“Real estate is a powerful investment tool for anyone seeking financial independence or freedom. It is a unique investment tool. Yet every time I mention real estate as a vehicle, I often hear, “I don’t want to fix toilets.”
The people who continue to say “I don’t want to fix toilets” often deny themselves the use of this powerful investment vehicle. Toilets are more important than their freedom. That is the thought pattern that keeps most people poor.” Robert Kiyosaki
Today we are going to talk about how to build real wealth by buying properties, without having to actually worry about tenants or toilets. Because, as the quote above shows, these kinds of things rob most people of the opportunity of creating the lasting wealth that real estate can give them.
The Poor Buy Liabilities, the Rich Buy Assets
If you have read the book Rich Dad Poor Dad you might remember the lesson about what are the differences between what the rich buy and the poor buy. It comes down to the distinction between an asset and a liability.
An asset is something that brings money in (positive cash flow), while a liability takes money out (negative cash flow). You don’t always know in advance whether something is an asset or a liability; you have to look at the numbers to see the difference between income and expenses.
For example, a great stock that at first sight might seem like an asset might turn out to be a liability when you look at the myriad of fees from brokers and the spreads in the market. In the case of real estate, a seemingly great property can in reality be a liability if there are excessive repairs or if the rent is not high enough to cover all of the costs.
While the thought process of the poor when deciding to invest in real estate is “this house is nice, and it is in a great neighborhood. My friend told me property prices always go up”, the rich actually take a look at the data and make informed decisions about their investments. What we are saying is that you shouldn’t buy real estate because of a ‘hot tip’ from a family member nor because of an untested assumption. You need to actually see what will happen with your net worth once you put your money down.
Passive Investing vs Active Investing
It is very important to understand that the only way for you to build a massive real estate portfolio is by leverage. You need to leverage other people’s money, time, and expertise to build an empire that will take care of you and your family’s needs for the years to come.
That’s where passive investing comes in. In contrast to active investing, passive investing means you do not need to be actively taking care of the investment. You analyze the numbers, put your money in, and then oversee it. If you choose your partners correctly, you’ll soon start seeing your money grow.
Real estate CAN BE a passive investment. This means there is no need for fixing toilets and always collecting money from your tenants. Remember, passive investing does not always mean a 100% automated investing, but it is rather “an investment strategy to maximize returns by minimizing buying and selling” - source, Investopedia.
How do you do this yourself? How can you turn real estate into passive investing that builds your wealth while you sleep?
Leverage a Good Partner to Make Real Estate Investing Stress-Free
Here’s another quote from Robert Kiyosaki:
“Because I, too, do not want to fix toilets, I shop hard for a property manager who does fix toilets. And by finding a great property manager who runs houses or apartments well, my cash flow goes up. But, more importantly, a great property manager allows me to buy a lot more real estate since I don’t have to fix toilets.
A great property manager is key to success in real estate. A great property manager often hears of great deals before real estate agents do, which makes them even more valuable.
Finding a good manager is more important to me than the real estate.”
Can you see the difference in thought patterns from a successful investor? What it means to be a passive investor is to leverage the time and expertise of other people, in this case, a partner, to be able to invest in more properties and really build a stable portfolio.
There is a difference between being a passive investor vs an active investor, though. When a group of investors gets together to pool their resources and buy higher return properties, commonly known as a syndication, there are both active and passive investors. Active investors, also called General Partners (GPs) do all the day-to-day work to acquire and manage the property. Passive investors are Limited Partners (LPs) in the syndication that provide financial resources to help acquire the asset and therefore receive a majority share of the returns.
When you think in terms of leverage, not doing everything yourself, you will see that a real estate syndication will allow you to a) access deals that would otherwise be almost impossible to get into on your own, b) increase your returns by getting an equity share from your investment, and c) be a passive investor. General partners have unlimited liability on the investment, while the limited partners are only liable for up to the amount they contribute.
So you could be a limited partner and let an experienced person take care of the investment for you. That way, you are building a passive portfolio and leaving the trouble of toilets and tenants to a person who will take care of that. The key here is to invest with an experienced GP team, so you can actually enjoy the freedom of time while your money works for you.
Freedom From Real Estate Without All the Trouble
Real estate is a time-tested investment vehicle for creating massive wealth while enjoying the time freedom of passive investing. Are you going to let the worry of toilets and tenants rob you of that?
There is a better way. Here at Titanium Investments, we have a team of dedicated professionals that can help you achieve your dreams through investing in real estate. And we make the process simple and stress-free.
Schedule a call with us here so we can help you define your investment goals and match your objectives with one of our projects. At Titanium Investments we believe smart passive income investments can give you the life you’ve always dreamed of. Start to create yours today.