Why Apartments Are The Sing Best Way To Escape The Rat Race Within 3-5 Years
Are you wholesaling, flipping, or landlording? Have you thought about how long will it take for you to quit the rat race? Most investors never ask that question and waste years pursuing a real estate strategy that will never let them achieve their financial goals.
I never asked the question and delayed my retirement by YEARS with the wrong strategy.
It was 2005, a year after I read Rich Dad Poor Dad, and I decided that I needed to start with real estate investing to generate enough passive income to NOT have to work.
I educated myself. I hired a mentor. And I began to flip houses. Over the next several years, I ended up flipping 34 houses and made great money. But then I then realized that flipping houses was:
- Not generating passive income,
- Was a TON of work, and
- Was NEVER going to let me quit the rat race.
I didn’t realize these things because I never asked myself this one question:
Can I Quit the Rat Race With My Current Strategy?
In my case, I hadn’t asked this question — my goal was just to get started with real estate investing. But I now realize by NOT asking this question, I wasted several years pursuing a strategy that would NEVER help me retire.
That stops today because we’re all going to ask (and answer) that question right now.
To answer this question, you really need to be clear about your goals. And the best way to do that is by asking these next four questions:
- What’s your rat race number?
- How passive do you want your income to be?
- How many rentals would I need to own to retire?
- What’s the best strategy to achieve your goals?
Let’s start with the first question.
What’s YOUR Rat Race Number?
The rat race number is the amount of money you would need each month to cover to quit your job. Specifically, it’s the amount of passive income you need to cover your most basic living expenses.
If you could have your real estate investments produce THAT much passive income each month, you could quit your job, retire, or do whatever you wanted.
That’s your rat race number, and THAT’S what you’re seeking with real estate investing. Am I right?
For the purposes of our discussion, let’s say that you’ve sharpened your pencil and decided that you needed $5,000 after taxes to cover your living expenses and quit your job.
Then ask yourself the next question:
How Passive Do I Want My Income to Be?
Flipping houses is still a “time-leveraged” activity, meaning it can produce more income than many day jobs that have you strapped to a desk for 40+ hours.
But it’s still work. If you’re not buying, fixing, or selling houses, you ain’t making money.
Same thing for wholesaling: If you’re not marketing, talking to sellers, and doing deals, you’re not getting paid.
And the worst with either of these strategies is that they don’t give you any kind of residual income. When you sell the renovated house, you (hopefully) make a profit, but then that house stops paying you. It’s over — the money stops flowing.
At this point you might throw up your hands and say, “OK, Michael, but if it’s not wholesaling or rehabbing, then it must be rentals, right?”
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