How to replace your income with real estate investing

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What's up guys, my name is James and in today's video, we're going to talk about how to replace your income with real estate investing. Now this is one of the main things that I find people I speak with on a day to day basis are looking to do is they want to invest in real estate so that they can become financially independent.

So they can replace their full time job income with real estate investing income. And sometimes you'll want to do that so they can quit their job, a lot of people out there hate their nine to five, and they want to get out of it. And then other people want just for that sense of security. You know, if you're working in a job and you realize, especially going on right now that you have a really finite timeline that you're very disposable that you could be laid off, then a lot of people just desire to have some security knowing that, hey, even if I do lose my job, or I want to quit my job in the future, I have the freedom to be able to do that. Because the income I have coming in for my real estate investing is more than or equal to what I earn from my day to day job.

So I'm going to talk to you about how you can do exactly that I'm not going to focus on the longer term equity building wealth building, because that stuff is more of a cherry on top. For most people, a lot of people want to just replace their income, and they want to focus on cash flow with their investing. So that's what we're going to be talking about in this video.

Now, if you want to learn how to use the exact same strategies that I use real estate investing, namely buying short term rental properties, and do this in a way where it's going to replace your nine to five income quicker than any other real estate strategy I've ever seen before, then click the link down below to schedule a quick call with me. In that quick call, we can talk more about how I might be able to help you to start investing in short term rental properties and replace your income entirely with your rental income.

So again, just click the link down below to schedule a quick call, I am going to work with a really small, tight knit group of students in a private mentorship program over the next six months here, helping them to get started investing in short term rental property. So if you're interested in learning more about that you want to get involved, then just click the link down below to schedule a quick 15 minute call with me.

So let's dive into it. Let's start talking. What you really want to be focusing on is cash flow. If you're looking to replace your income, that's really the number that matters most. By far, a lot of people like to overcomplicate real estate investing and talk about things like the cap rate, and your cash on cash ROI versus your total ROI, the equity build up that you get from paying down your mortgage, the appreciation, you might get all these different things and all that stuff and understanding that is all well and good. But at the end of the day real estate investing doesn't have to be that complicated.

Really, what you want to look at is what is your goal, and what is the quickest and easiest way to get there. And if your goal is to replace your income, and the quickest and easiest way to get there is through cash flow, it's through actually having a property that brings in money each month, that goes right into your bank account. Because at the end of the day, paying down your mortgage and building up equity in your property is not something that you can live on appreciation on your property, that's not something that you can live on.

So you're not really replacing your income when you build wealth or get a return on your investment in those ways. The only way that you can get an ROI that actually can replace your income and actually serve as usable income money is by cash on cash ROI, that actual cash return that you get meaning the money that comes in every single month from the people paying you to stay with your real estate.

And so that's what leads me to the strategy of investing in short term rental properties because I've never come across another real estate investing strategy that yields a better cash on cash ROI. Meaning that puts more money in your pocket after paying for all your expenses actually gives you profit at the end of the day. More so than short term rental. If you think about long term rentals, you're gonna be lucky if you're buying, let's say, a single family home to cashflow a couple $100 a month.

Now for most people, if they're looking to replace a decent income of you know, 80 100 $200,000 a year, it's gonna take a lot of properties out a couple $100 a month to get there, just to get to a six figure income, you're going to be looking at upwards of 1020 properties just to get to a point where you've replaced your income.

Now to do that, it's going to take you several years, it's gonna take you a lot of lending, you're gonna have to really leverage yourself and have a lot of debt looming over your head. There's a lot of different facilities. There's a lot of components involved with buying that volume of properties, not even to mention the amount of downpayment money that you're going to have to save up to do that.

So for that reason, buying single family homes doesn't make a whole lot of sense. If the primary goal is to go and replace your income now buying single family homes for long term rental that is we take those single family homes, we turn them into short term rentals, then oftentimes they can cashflow incredibly well and you can have property They're bringing in 3040 $50,000 a year in positive cash flow, as opposed to their long term rental use, which would only generate you a few $1,000 a year, maybe call it six to 10.

So drastically different numbers in terms of cash on cash return. And now suddenly, instead of having to get 10 to 20 properties, you really only need maybe two properties to replace that six figure income, which means you have to borrow a lot less money from the bank, have way less money saved up for those down payments, and you can get there a lot faster, usually within one to two years. That also means that you can then take that money that the properties are cash flowing, if you do keep your job and fall into more properties.

So now you can grow even more quickly. And if we compare the same strategy there to, let's say, multi residential real estate, sure, multi residential or commercial real estate can be a good option, you can get more cash flow from those properties because there are more units and therefore more tenants paying you money. But you also then are not going to be anywhere close to the amount of cash flow you can get from a short term rental property relative to the amount of value that you know the price that you're paying for the property.

To get a long term rental multi residential commercial property that's going to cash flow as well as a short term rental property, you're usually going to have to spend orders of magnitude more on that property. For my experience, a $500,000, Airbnb or short term rental property tends to cashflow about the same amount as about a $4 million long term rental property.

Now, I don't know about you, but the downpayment on a $4 million property is going to be a lot harder to come up with for most people. So buying a long, you know, big huge multi residential complex is going to be really challenging for the average person, it's gonna take a long time to build your portfolio up to the point where you can actually afford to do that.

Now, you also need to factor in that you're going to be paying a higher down payment amount on those properties, the big commercial properties, you're looking at 30 to 40% as your down payment. So again, that's another big barrier that's going to shorten your timeline to replacing your income. It also means that you're going to have a whole bunch more debt with the bank.

So you have to be prepared for that and be comfortable with that. That's why from my experience, the easiest route to replacing your income with real estate investing is through short term rentals. You can buy properties that are going to be uniquely well positioned to cashflow incredibly well. And with a $500,000 property, you can cashflow over $50,000 a year, meaning that with just two of those properties and a million dollars in total real estate value, you now suddenly have fully replaced your six figure income.

So that's my recommendation for anyone who wants to start replacing their income through their real estate investments. The quickest, easiest shortest timeline to do that is by far short term rental properties. So if you want to learn how to actually leverage this strategy, how to actually go out and find the right property that is going to cashflow those numbers that is going to be able to replace your income, then click the link down below and schedule a quick call with me, I'd love to talk to you more about how we can make that possible for you and how we can make that happen.

Again, in that 15 minute call, I'm going to talk to you more about how we might be able to work together in a private intimate six month private mentorship program, where we can show you exactly the strategies that we use to be able to build these properties up and get them performing exceptionally well to the point where one single property can cashflow 4050 $60,000 a year and we're talking profit.

So again, if you want to learn the strategies for that, click the link in the description down below. schedule that call with me and I would love to talk to you soon. If you like this video. If you thought it was good insightful, then give me a quick like button just click it there give me a quick thumbs up. It really helps me out tremendously with growing this channel and getting more people exposed to the incredible opportunity of short term rental properties. So I'd love it if you just take a quick second out of your day helped me out a lot and just hit that like button.

Now if you're already if you're here, you've seen this video and you're not already subscribed to the channel, make sure you click that subscribe button. We post two new videos every single week all about short term rentals, investing in the managing them everything you need to be able to make money off of short term rental properties. So go ahead and hit that subscribe button if you're interested in staying up to date with the channel and those two new videos we post every single week. Until next time, I'll see you in the next video.