I responded to a post about if it was possible to make 20k a year from investments. I got a bunch of messages so I figured I would just make a post here, and I did not want to take away from that post. This is also probably border financial Independence.
I personally believe real estate is one of the few ways to jump out of the middle class if done right. I don't need to be go to college (even though I am) and I don't need a 100k a year job (would help a lot though).
BUT BUT BUT---------
There is more than one way to get great investments without real estate and stocks. I will try to touch on those here so skip if you just want to hear about my investment. There was a poster that mentioned his locker investment. That is great! I have an aquatienc that rents out storage lockers and he makes good money for little work. It is similar to a car wash he also owns, once you pay off the initial building it is free passive income (mostly). Other things that I have heard are nice are owning vending machines, ATMs, claw machines, or anything of the such. I do not personally know much about them but I plan to look into them. I have heard good things about them but I was also told it tends to be more stress and work. Now I know people will say "that's just a job not an investment". I disagree. You are easily making just as much of a passive income as you would with an initial stock investment.
The reason I dislike stock is because I feel there is a lot more work, stress, research, and unpredictable things that will affect it. I do own stocks and try to diversify my investments, but they are just not my favorite.
But how I plan to do it. Mostly with real estate. I purchased a house for about 30k. Forclosure, ugly as fuck, beat up. Overall it needed tlc which was simple. Most people can't see past that though. Patching a few holes and replacing a floor is easy. I use to consider myself a fool with tools. But it is just being intimidated. Don't worry much about it. While I was at it I fixed and updated a few things such as the roof which can be easy as well. Most people can learn how to shingle a roof. I also replaced cabenit and a few other odds and ends that were not required but made it nicer.
The idea was to make it nice so if the tenets leave soon it won't need another remodel but also so I do not have to worry about old X breaking in 5 years or a X breaking in 15 years. I knew it was all good.
Overall I spent about 42k on the house. It took me a month and a half to work on it but it was not constantly. I still worked my full time job. I did not buy it all up front either. I got a loan and only put down 10k. At 4% interest I was better off holding more cash.
I get a little more than 12k a year from the rent. I pay about 1.1k in taxes. I pay almost nothing from fixing it since I took care of that already. I worry a hell of a lot less about it than my stocks. I don't have to worry about earning reports every Q or what Trump did today. If you work in nice neighborhoods you don't have to worry much about crime and doing proper research on tennent is very important. But it is not really difficult to find good ones.
You will always hear people complain about nightmare renters and they are out there and people will scam you. But in the average neighborhood most people are just wanting to find a place to live and get on with their life. I have had more issues with younger folks than older ones though, parties or just plain irresponsible.
Now the fun part is not worrying about if the economy tanks as well. If it does people still need a place to rent. If house values drop then I don't sell. I have enough income to support them, and if they are paid off even easier. I would buy more when that happens. Rent may have to go down depending, but that is still more income and only lower for a little while.
But you need money to make money. It is so true. I did spend some time saving. I knew since I started working at 15 I wanted to own a house and retire early to enjoy life. Fuck the man and what have you. I purchased my first house when I was 20 ( with loan of course) and when I sell it soon I will probably end up making 50k ish on it. I plan to move to a cheaper cola (CA to WI or something) and not worry much about mortgages like I do here.
But how did I do it, I must have a nice job? I make about 45k a year. I saved money, lived somewhat frugally, and just did my research. Learning to do things yourself helps a ton too. Just from owning the one house I mentioned above makes it easier for me to get a loan now because I've had renters for 2+ years. I plan on finding the next good deal. With about 3 of those I plan to retire. I'll have my house and for sure the second house paid off. I'll have to do a little work here and there. But I enjoy it. I'm close to buying another rental property as well so it is not to far off into the future. And even if it doesn't happen when I think it will I will still be making good money for such a little investment. I don't need a million dollar net value or 400k in stocks to collect dividend. With 4 houses I'm looking at 150k assets if I sell them (which is stupid) plus whatever value my house is.
I hope this helps someone. It is not for everyone. And not all real estate will bring in decent money or a good return. But I feel like it is a little more figured out. If you have any questions though feel free to ask away.
TLDR: Real estate. 40k investment with a 4% loan earning ~12k before taxes. Learn to work yourself.
Submitted May 21, 2017 at 04:39PM by EpicMudbud http://ift.tt/2q755IL
