This is the podcast for real estate investors because nowhere else will you get a straightforward and honest discussion about everything surrounding real estate investments. People always ask: “how do I get started in real estate investing?” and my initial reaction is how much cash do you have? Because most people’s mistake is that they don’t accumulate enough before they think about getting into real estate. You can buy all the online real estate courses you want, but if you don’t understand a few basic principles first, there’s really no point.
So for starters, let’s talk about wealth for a second. Every wealth-building journey happens in phases:
- Phase 1: cash generation, which is pretty basic. You need money to invest and acquire assets, and how you do this can vary depending on the market you’re in.
- Phase 2: multiplication of cash, which can involve some risk as you’re taking your own cash and reinvesting it to grow into more cash on hand.
- Phase 3: wealth preservation, meaning that you have so much of it that growing it is no longer a concern, and rather than taking the risk to grow your wealth, you are interested in preserving it.
Right now, I am in Phase 2. I’m using real estate to turn my money into more money, which can be a process. The problem however, is that a lot of people use real estate as a cash creation tool when it is not. In my mind, there are many ways to generate cash, and this is not one of them.
Real estate is very good at growing wealth, but it’s not the best when it comes to making zero grow into one. Most of the real estate entrepreneurs I know have been successful in other ways as an entrepreneur and small business owner. If you don’t have cash, then real estate is not the best option for you–not yet anyway. Listen to The Sweaty Startup Podcast. It’s one of the top entrepreneur podcasts out there for small business entrepreneurship. This is all about Phase 1 when it comes to wealth creation–going from zero to one, trading your time for money, and then building your business to the point of generating thousands of dollars in profit each year. Once you do that, come back here and get started on Phase 2.
One more thing is that money talks in real estate. When you have none, you can’t do anything. You have no cash to pay the bills when times get tough because real estate is not a liquid asset. If you have no cash reserves then you’re screwed. Take the advice for what it’s worth. I’ve said it before, I’ll say it again: I don’t know everything! All my advice that I talk about here and in my real estate investing courses, all it comes from one person who’s got one set of experiences. There are a thousand ways to win, so get a lot of advice and if it makes sense to you, then use it to get smarter and wealthier.
Three Key Takeaways:
- How much cash do you have? When investing in real estate, you need to have cash to even get started. There are a lot of ways to do this, but this is priority number one.
- There are three phases to wealth-building: cash generation, multiplication of cash, and wealth preservation. Knowing which you are in during your wealth-building journey is essential.
- Real estate is good at growing wealth, but not when it comes to making cash. Most of the real estate entrepreneurs I know have been successful in other ways first as small business owners and entrepreneurs.
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