Cedar River Properties Newsletter (1/21/23)

This week’s newsletter is something I am passionate about.

It involves the topic of Financial Freedom.

Many people go to school to get a good job. Shortly after that, they realize they must work until retirement age before they can enjoy life and do what they really want to do.

However, that is only one way to do it.

There is another way.

On the other hand, you can actually create a life that doesn’t require you to spend all of your time at your job or career.

If you find a way to make money without trading your time, and that income exceeds your monthly expenses, you are financially free.

Below are two different ways to reach Financial Freedom using real estate.

Two Different Paths to Financial Freedom Using Real Estate

1. Purchase rental properties that cash flow enough income to cover expenses

2. Invest Passively in real estate to earn a return on money

In these examples, we will be conservative and say the person wants to make $5,000/month in passive income. This would total $60,000/year.

Obviously, this amount will seem low to some people and high to others. I am simply using it as an example to base the following scenarios off of.

1) Purchase rental properties that cash flow enough income to cover expenses

This option involves being an active investor. This includes analyzing deals on a daily basis, walking properties you are interested in and then making offers on ones you would like to pursue.

If fixing up the property, you would have to either do the work yourself or manage contractors.

This also would include the management of the property if you are not using a property management company.

As we all know, this takes hours of your time each week.

Some people are busy enough as it is and don’t want to be an active investor and have to deal with all of these tasks.

In this scenario, if each unit made $150/month on average in cash flow after all expenses are paid, you would need to acquire approximately 33 rental units. This could be 33 single family homes or a mix of single family homes and small multifamily properties such as a duplex.

Some people, including myself, like being active in real estate. However, if that's not you, see the second option.

2) Invest Passively in Real Estate to Earn a Return on Money

I believe most people like to invest passively and have their money work for them.

If an investment earns an 8% preferred return and they want to make $5,000/month passively, then they would need to invest $750,000 to reach their monthly passive income goal.

This doesn’t include profits from refinance or sale of the apartment. This is strictly cash flow.

This is obviously a lot of money, but I was simply using that number as an example. Some people don’t need or want as much income as others. You just have to find what works for you.

This scenario involves some time commitment up front to vet the sponsor and the deal. However, after that, it is very hands-off with minimal time commitment.

This allows you to have your money working for you while you sleep.

These are two different options people can take to reach Financial Freedom using real estate.

Obviously, some people enjoy their careers and like their work. If that’s you, there is still a way to put your money to work through real estate.

If you don’t like your job and want to reach Financial Freedom sooner, these are some options as well.

Once your passive income exceeds your monthly expenses, you are financially free!

If interested in passive investing opportunities through apartment investing, check out the link to my website below and fill out the "Invest with Us" Form.

Also, if you are on social media, follow my Instagram account for more real estate related content:

@realestatewithcaleb