In this video, I’m going to show you how to create multiple streams of income using the power of real estate and generate passive income to be recession proof.
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Transcripts:
If you’re like most people, your financial stability is like relying on a one legged stool. That one leg represents your only source of income, whether from a job or if you’re self employed, sales or commissions from a single product category. As long as the market is good, your income is good. But if the market starts to decline, ultimately your income starts to decline too. That makes your one legged stool start to wobble and maybe even crash. You can be more financially resilient in all market cycles by adding multiple streams of income.
That way when one income stream during a market cycle goes down, you’d have other income streams to support you. This lesson hit me hard a few years ago, my wife and I, we scaled a house flipping business and that represented about 99% of our income. However, when the market got really hot, inventory got low, so there’s less deals available. And on top of that growing competition made it more competitive. Ultimately, our margin started shrinking, as did our income. That situation, we had to take on more risk if you wanted to continue to grow and do more deals. Ultimately, we realized we needed to diversify our income. We weren’t completely reliant on just income from flips.
Now with the economy in a transition, it might be a good time to start thinking about complementary products or services that you can provide your clients or your customers to support your primary source of income. Or maybe there is a completely unrelated opportunity that you can take advantage of and sometimes those actually ended up growing to something far significantly more than what your primary source of income is now. These are the five additional income streams we added to our business to diversify from flip income. One of the income streams is now far exceeded every other income source we have, except from sales of our investment properties.
Number one, rentals. This one wasn’t exactly new to us since we had rental properties before. But we made an intentional effort to flip last houses and hold more as long term rentals. This allowed us to build a portfolio of rentals that were providing passive income and building wealth passively. Now we strictly hold properties long term.
Number two, short term rental income. We set up two properties on Airbnb and VRBO to start earning short term rental income. Ultimately, this is not like long term rentals. It’s not passive. It’s a very active business. But when done right, it can produce a lot more cash flow than what you would get from long term rentals.
Number three, realtor commissions. Since I’m a real estate agent in Texas, I was able to bring all the transactions of our investment properties and house and start earning commissions and all of those transactions. Also, all the homeowners who weren’t interested and then as is cash offer off market transaction was able to offer them to list their home on MLS and help them get their home sold. Because ultimately, they were interested in selling their house, they just didn’t want to sell off market they wanted retail. Since I had my license and I had a team of agents that I worked with, we were able to very easily add an entire new category of income and increase our commissions.
Number four, stock. Now I’m not a stock guy. This may seem a little strange, but when someone showed me that if I moved my license my real estate license to eXp Realty, I can earn stock awards and every single transaction that I was doing that was an absolute no brainers essentially free money. And to date, I’ve been able to accumulate thousands of shares of eXp stock, which has been very lucrative to my family.
Fnally, number five and that’s revenue, share. eXp has a three tier income stream model versus commissions, second is stock and then third is revenue share. This is the passive income component that eXp provides its agents. It’s a seven tiered system where eXp ultimately pays out 50% of all the money that comes into the brokerage they pay that 50% out to the agents through the revenue share program. That’s created tremendous opportunities, being able to work with and collaborate with real estate agents all across the world and build passive income and to date, this one income stream has exceeded every other income stream that I have, with the exception of the sales of our investment properties.