People ask me all the time how to get started in real estate, and I provide an answer that most people don’t want to hear. I always respond by asking how much cash they have. The mistake that most people make is not accumulating enough cash before getting into real estate, and most people asking me don’t have enough cash to really get in safely and confidently.
There are three main phases of wealth, the first being cash generation, which is creating cash out of thin air. This is usually obtained by exchanging your services for an agreed-upon rate, and it’s how the vast majority of entrepreneurs start out. Once cash is generated, you transition to cash multiplication, where you can watch your wealth grow. Things like a large real estate or stock portfolio will grow even with minimal action on your part. The last phase is wealth preservation, when you have the money you need and are primarily concerned with not losing it.
I’ve created my wealth, and now we’re multiplying our wealth. We use real estate as a vehicle to turn money into more money. But too many people see real estate as a cash-generation tool, and there are truly better ways to generate cash. Most people that I know in real estate had made their first chunk of money somewhere else.
In 2011 I was a middle-class kid with $20K to my name from mowing lawns. I knew that I had to find a way to generate cash, and Storage Squad was able to put cash in our pockets and taught us how to run a business. After years of that, we had the cash to put into a real estate deal. When you’re able to get into real estate with a bit of cash to start, your snowball will get rolling a lot quicker.
If you’re early on in the journey without much cash, then you need to find cash. Get the snowball rolling and you’ll be taking the first step to generating on paper millions of dollars in wealth. If you have no cash, you have no leverage and money talks in real estate.
If you have a wealthy family, cash of your own, or wealthy friends you could reach out to as investors, then you can ignore me and get yourself into real estate. But what’s the best way to get started if you’re not ready for real estate? I would say turn off this podcast and go look up my Sweaty Startup podcast. It’s all about wealth creation, going from zero to one, trading your time for money, and growing a business until it can reach a six-figure profit. Do that for a couple of years and you have the cash to go into real estate.
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