How to Build Multiple Passive Income Streams

Passive Income Retirement

Looking for, passive income streams, for retirement? Jack Gibson, President of High Return Real Estate, shares how to use real estate to build passive income.

Today’s episode in the 3rd in our series on building wealth with Real Estate investments.  My intention is to sow seeds into your subconscious that 2019 is the year to build your net worth. The power of intention is an invisible force of energy in the Universe. It is activated when we become inspired and will propel us towards our goals.

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  • Guest Biography

Jack Gibson began his entrepreneurial journey at 19, and founded his first company at the ripe old age of 21. Operating a successful nutrition consulting and distribution company.  He had built a multi-million dollar venture before he was old enough to rent a car. Soon thereafter, he bought his first home as an investment. One home quickly became five, and then the bug hit. He became obsessed with learning everything about Real Estate Investing and soon had over 50 investment properties generating Massive amounts of passive income. Today, Jack spends his time mentoring other entrepreneurs, building his real estate investment portfolio, and helping other investors to build a brighter future through the power of turnkey real estate income.

 

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Show Notes

My very first business that I started at age 19 was  a multi-level marketing nutrition distribution business.  The whole goal of that business was to build up a sales team and create ongoing, passive streams of income, so  I got that concept right away. I built that business up over the years and we currently have annual revenues over ten million dollars.  The last couple years it’s been a little bit more part-time or quite a bit more part-time as I pursued building my real estate company.  But I mean I still love it, I still love the people and I love the, passive streams of income,.  Two years into my network marketing company,  I read the book Rich Dad Poor Dad, that was the book that really transformed my mind to start thinking about utilizing real estate as a way to deploy the cash that I was making in my primary business and add additional, passive streams of income,.  I was still investing in stocks until about 4 years ago.  I was in stocks for most of the last 14 years, so about four years ago two events happened that were critical and really pushed me over into investing into real estate as another, passive streams of income,

There were two negative events,  but you know most negative events if we look back we can find the good in them.  One of them was I had some insider information, not anything illegal by any stretch,  I mean I knew that our company had a good earnings quarter.  I mean it wasn’t that hard to figure out based on what I heard from all my colleagues, so that’s kind of my insider information.

I bought into the stock about a week before the earnings report was to be released expecting things to be great.  Well the earnings report was phenomenal and typically, not always but typically stocks go up when the earnings report is great.  Well this  billionaire Hedge Fund investor was very well known as  an activist in terms of shorting stocks.  He gets on our company earnings call,  he asked  three or four pointed questions and then it appeared that he was shorting the stock;  the stock drops 30% overnight.

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Stocks as a, passive streams of income,

I realized then that I didn’t have control over stocks. Not even a sure thing is guaranteed. I want to be in the driver’s seat and put myself in a great position where I have as much control over the outcome as possible.  I took that as my sign that this is my time to learn a new asset class and another, passive streams of income, it was the final push.  I told myself, I’m going to draw the line in the sand.  So I studied real estate and listened to podcasts for a hundred straight days.

Jack you know that someone listening is going to pay devil’s advocate and say the same thing happens in real estate.  What’s your come back on that?

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So here’s what we have to consider when looking at real estate as another, passive streams of income,  we look at the past.  I mean could go back 100 even you know 200 years or whatever, the variance between real estate and the stock market is almost four times different.  If you look at historical data,  the swing in the stock market is around a variance of 16 or so from year to year.  Real estate has a variance of four.  That means from year to year on average that the swing in the market is going to be four percent, so you’re not quite so volatile in real estate.

The other part in this, passive streams of income, scenario  is it that you’re  investing in the real estate as  Robert T. Kiyosaki says, for the cash flow that it produces.  Not necessarily for it to go up in value.  You really don’t care if it appreciates or depreciates. As an investor and you’re renting it out and you will always be able to rent it out for more than the mortgage payment.

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At the same time  property values  will go up eventually, even if it dips for a little in the short term.  I was listening to the Automatic Millionaire Homeowner and the author was interviewing homeowners who lived in their homes for about 2 years and then sold and moved to bigger homes, and became millionaires because homes always go up in value.

We’ve discussed  real estate, we’ve talked about the stock market and we’ve also talked about multi-level marketing.  I understand why that’s been your foundation for, passive streams of income, because you’ve been you’ve been taught well.  You stayed in the business  for 20 years so you must be really doing well, because everybody that joins the business under you feeds you, passive streams of income,.

Multi-Level Marketing a Tool for generating, passive streams of Income,

Yea, it is phenomenal. If I could describe the business to people without saying what it was they’d be like wow that sounds too good to be true. I have a multi-million dollar business that I work right here from my home office.  That I help people with their health and nutrition. I have no employees, I have no accounts receivable.  I have no inventory, I have no monthly overhead whatsoever.  I have a free cash flowing business that produces ten to twelve million dollars in sales revenue per year.  That’s not obviously my income; but a percentage of that.

Skilled , passive streams of income: Writing a book, Music, software

That’s why, passive streams of income,  is so important.  On my website, www.myhelps.com  I talk about a some other forms of, passive streams of income,  like writing a book, or writing music.  Mariah Carey wrote the song “All I want for Christmas”  in 15 minutes. She’s generated sixty million dollars in royalties off of that 15 minute work.  So her, passive streams of income, is phenomenal.

Explain what we mean by, passive streams of income,  which ones would you recommend it to a seasoned investor or someone just starting out?

Passive income is created from work you have done in the past, that is paying you today.

You have one or two scenarios.  You either have money at work or capital at work and you’re drawing royalties. There’s multiple ways to go about creating, passive streams of income,  it boils down to either unskilled or skilled forms of passive income. It’s like what you talked about in terms of creating music and selling music, or writing a book, or creating a piece of software that you then are able to license out and sell.  Those are very technical skills, very skilled types of, passive streams of income,.

Creating, passive streams of income, from a business  I won’t say is unskilled in terms of work. It does it takes skills to put the right management team in place.  There’s a way you can have any type of business that you set up  to become a, passive income stream, if you’re not involved directly in day-to-day operations, then it’s a, passive income stream, business.

To listen to the full interview, download on iTunes and please subscribe and leave a review.

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Check out Jack on the web https://highreturnrealestate.com/.  All of our properties are listed on the website. Nicole is the Head of Investor Relations and she will be happy to answer any questions.

On the nutrition side,  we have a brand new system, it’s a nine week online body transformation Course that we’re planning on scaling so that over 10,000 people can participate. Check out Jack’s Body Transformation podcast 

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Additional Resources:

Top 20 Areas In Miami For Increasing Property Values

25 Best Passive Income Ideas to Make Money in 2019

https://wellkeptwallet.com/passive-income-ideas/

https://wallethacks.com/passive-income-ideas/

How to Create a Freedom Lifestyle with Investment Property

How to Build Wealth with Turnkey Real Estate Investing

Investing in Rental Properties

You want to invest in, turnkey real estate investing,  near in or in  bigger cities, near big employers, and near downtown areas.

Jeff Schechter, CEO and co-founder of High Return Real Estate teaches, how to build wealth, through, turnkey real estate investing, Jeff has been helping his clients build wealth through, turnkey real estate investing, for close to 40 years.

As a  Realtor, real estate investor, as well as  Life coach.  I myself have been in the, real estate, business for some time 19 years. So I can lend a lot to this conversation. In fact if you google, Realtor Life coach, I am at the top of the list! .

CEO & CO-FOUNDER Jeff Schechter, aka “Shecky” has had the entrepreneurial bug his entire life. He started his first business right out of college, and over the years been involved in numerous businesses ventures. His love for, real estate investing, began in the 1980’s, when he rehabbed 5 of his own residences, before the term, house hacking, even existed.

Since those early days of torn up kitchens and bathrooms, he’s bought and sold many properties, and is an active investor to this day. In addition to investing, he operate a private consulting practice. He thrives on helping people realize their full potential…not just in business and investing, but in all aspects of life.

Turnkey Real Estate
Turnkey Real Estate

What was the fire starter that got you into, turnkey real estate investing?

I kind of sucked at school. I was not very focused. I came from an incredibly traditional Background, where I just reversed a lot of expectations placed on me.  As a result it was very difficult for me to follow through with stuff in college.  So entrepreneurialism and starting my own businesses were really a form of necessity, because I didn’t really have any terrific formal training. It was also a form of establishing my own, freedom Lifestyle.

What made you choose, real estate, as your business?

I just always kind of have this entrepreneurial bend and would look for ways to increase my income.  Eventually I started seeing that high ticket items like homes, had lots more opportunity for profit. I figured out back in the 80’s, I could buy them in not as good a condition and be able to buy them for a whole lot cheaper than what the pretty ones were, and I could fix them up and add a whole lot of value to them, because people were willing to pay a premium for the really nice homes.

So what I would do is, I would just live in them for a year or two while I was fixing them up and then I would sell them and move on to the next one.  It was a way to make some really nice extra profits and live for free for many years.

That was kind of the initial seeds of my, real estate investing, career before I started, turnkey real estate investment,

That’s also a good model as well, because you know the government helps you with the capital gains tax breaks. If you live in a house that’s your primary residence for two years and sell that home, then you can earn up to $250,000 in tax free income if single and $500,000 if married.

I actually didn’t know that at the beginning, but learned it very early on.  I would figure out that I wanted to live in most places exactly two years and one day!

I was listening to the audio book “The Automatic Millionaire Homeowner” and the author was interviewing a lot of homeowners who started off with purchasing small homes, like buying a $30,000 home and then selling it to buy a bigger home and so on and so on. One homeowner couple who started off with like $3,000 or something like that to buy their first home ended up making $500,000 on a $750,000 property. All tax free!

https://blog.myhelps.us/how-to-invest-in-real-estate-with-no-money/

Fort Myers turnkey real estate investment

What is your advice for someone who is starting out today, Real Estate Investing, in 2019?

Someone  starting with a small house or a condo or something and trying to build wealth?

There is a bit of a downturn going on in the current Real Estate market, but you know, Real Estate, is cyclical and there’s a natural cycle.  When we look back at what happened  in 2009, the banks were doing some really stupid stuff.  Anybody could get a loan, even if they didn’t have a job.  It had to crash. Fast-forward to today,  there’s been a lot of  laws and regulations that has been put into place to prevent that situation from happening again.

But playing the appreciation game is dicey.  It’s not the way that we invest anymore in our, turnkey real estate investment, model; appreciation is not our primary concern.   What I mean by that is the only thing that we know for sure is that people need basic things.  They need food and they need shelter, and so from a shelter standpoint, we know that owning a basic property whether you call it a house, duplex, apartment, whatever it is, always going to be something that’s in demand, because people will always need a place to live.

You want to invest in, turnkey real estate investing,  near in or in  bigger cities, near big employers, and near downtown areas.  Rental properties are always going to be in demand in those areas. So what we look for from a standpoint of, turnkey real estate investment,  are properties  that we can buy inexpensively and sell as, turnkey real estate investing, that we don’t have to put a lot of money into rehab.  The price to rent ratio is everything to us. In other words, can want to  get a really good return on our money when we put that property out there into the rental pool.

So cash flow is more important to us than appreciation.  We start by getting that thing rented and cash flowing.  Even after we take out all kinds of money for taxes, insurance, property management, repairs all that other kind of stuff, can we still make a really attractive and in most cases, a double-digit return on our, turnkey real estate investing,.

If we can do that, we don’t really give a crap about appreciation.  We don’t even really care if we have a little bit of depreciation, because we always have the demand for the rental properties, and as such we will always have cash flow.  If we always have cash flow, we always have a great asset and the investors are happy.

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Is True Wealth Financial Freedom?

What is the, turnkey real estate investment, services you offer?

We offer fully finished performing properties that we have inspected, warranted,  and professionally managed.  The benefit of this service to a new or an investor or even an investor who already has a portfolio is we just know that we can do it better than they can.

We buy properties in bulk, so the properties are acquired for the right price, rehabbed correctly so that it’s in great condition.  It doesn’t need a lot of repairs moving forward and most importantly it has to be managed correctly for cash flow.

My business partner and myself are buying properties in the Midwest and Indianapolis and neither one of us lived in Indianapolis,  but we wanted to invest where it made sense.  In the last two and a half to three years, we’ve just really dialed everything back and built a better mouse trap.

We now have an amazing acquisition team, amazing rehab teams and a full property management division that really does everything.  We married the combination of this great city for investing where prices are low and price to rent ratios are really like the best in the country and we’re also in a state that has incredibly friendly landlord laws.

To listen to the interview, download on your favorite podcast player, iTunes, Google Play, TuneIn Radio, Stitcher, iHeart Radio, Podbean,

Please subscribe and post a review so that I can reach more to Transform your Mind, to Transform your Life

Additional Resources  for, turnkey real estate investment,

https://highreturnrealestate.com/turn-key-rental-properties-investment/

https://www.forbes.com/sites/forbesrealestatecouncil/2018/07/19/the-hidden-gem-of-turnkey-real-estate-investing-is-in-ohio/

https://www.biggerpockets.com/renewsblog/dont-buy-turnkey/

https://blog.myhelps.us/how-to-invest-in-real-estate-with-no-money/