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4 Ways to Make Money Passive Income with Real Estate Investing


How to make money in
real estate investing. That’s today’s video. Let’s dive in. [MUSIC PLAYING] Hey, everyone, I’m,
Clayton Morris. I’m the founder
of Morris Invest. I’m a longtime real
estate investor. My whole goal with
this channel is to help you create passive
income through owning rental real estate. That’s all I do,
and I want to help you do it with this channel. So today we’re going to talk
about how do you make money in real estate investing? If you’ve come to
this video, you’re probably curious about all of
the different ways to do that. And I know it can be
confusing, especially if you go to a Barnes and
Noble and you’re looking on the shelf
at different strategies and tactics for real
estate investing. Boom! Your mind can explode. Or not even just investing,
just in general, in real estate, how could I do this? How do I get started? What are all the ways
I can make money in it? Well, there are four
key areas that I think we should identify as
to how you can make money in real estate investing. And it really comes down to a
matter of personal preference. And what exactly
you want to achieve, and do you want to create
another job for yourself? So you’re probably
sitting back on a Saturday afternoon watching one
of those house flipping shows, Fixer Upper or Flip or
Flop or one of those shows. And you’re thinking, oh
that’s a good way for me to make money in real estate. I should try this. So that is number one. That’s one of the first ways
to make money in real estate is flipping houses. A lot of people like to find
properties at a deep discount. So whether it’s a
foreclosure, short sale, they buy it off-market. It’s vacant, they bought it
at tax sale, a sheriff’s sale. They bought it
from a local bank, they buy it from the government,
and it’s in disrepair. So you need to know
what you’re doing to get involved in flipping houses. There are a couple of
great training courses out there on house flipping
that’s not something I do, but you need to
be educated in it. You need to know, obviously,
cost of materials. You need to be able to
have money in the bank to acquire the
property or you know, borrowing money for a
short-term loan in order to complete that project
in a short amount of time, while you have a 12-month
loan on the property. You need to hire
great contractors. You need to know the
cost of your repairs so that when you
buy the property, the cost of repairs on
top of that, then what’s my potential profit? And is it worth me even doing
the project in the first place? So I work with a
lot of flippers. I know a lot of
flippers personally. And they’re constantly stressed. I like to go see their
houses and projects, and I’m always impressed
by what they do. But flipping houses
is not for me. But it is definitely
a great moneymaker. But it is also
transactional, meaning it’s paycheck-based, right? So you work on a house for six
months, you sell that house, you make 40, 60,
$120,000, great! Now I got to do another house. So I know some people
that do one a year. I know some people that
do multiple times a year. And again, it comes down
to it being a paycheck. You’re not really
creating passive income. You’re still working
for that money, and you need to move
on to the next project in order to bring more cash
into your bank account. So the first way is flipping
houses or even flipping raw land. A lot of people will do that. That’s one way to make money
in real estate investing. And it has a lot of work. If it’s something
you’re interested in, you really need to
be educated about it. Read some great books on it. Take some great training
courses from people who are doing it at a high
level, and stick on one path. Follow one great course,
get one great mentor, and follow that one
path until completion. Second way that you can
make money in real estate is to be a realtor or a broker. My dad is a realtor,
my wife is a realtor. And that is a great
way, of course, to make money in real estate. You’re not owning
the property, you’re simply representing
a buyer or a seller or sometimes both a buyer and
a seller in a transaction. And you’re selling a property. You’re listing a property on
the Multiple Listing Service. You have to go to
real estate school. You have to get trained
and get your certification. And then you have to do
continuing education hours every few years. I think it’s every
two years you have to do continuing education. It depends on the
state that you live in. And you get
registered per state. And then you go out
and work for a broker. You hang your license
with a broker, whether it’s Weichert
Realty or Century 21 or any of those companies. And you become a
real estate agent. Go out on the weekends
go to open houses and you list
people’s properties. And people pay you a percentage
of the sale of the home. You’re helping them
sell the house, and then at the
closing table, you’re going to get a
percentage of that. It’s a lot of hard work. And honestly, it’s
not a lot of money unless you’ve
really built a team and you’re doing a lot of
deals on a regular basis. So real estate agents– definitely a way to make
money in real estate, but it’s not investing, right? It’s still a paycheck. So that’s one way to make
money in real estate. And the third way to
make money in real estate is with wholesaling or
being in-between deals. Now with being a
wholesale investor, you don’t actually
own the property. And it’s also still a paycheck,
so you’re not actually investing in real estate. What happens is, you,
as a wholesale investor, you simply are
finding people that want to sell their property. And you then, basically, get
that property under contract to buy it or to then
sell the contract. And you’re going to
assign that contract to an end buyer like the
flipper that we met in step one. That flipper, now, is going to
spend eight months rehabbing that house. So you’re sort of in the middle. And you’ll take a finder’s
fee for a few thousand dollars or whatever in between
the seller and the buyer. Wholesaling can be
a great way to kind of kick-start your
investing journey, to get some money
in the bank quickly, and then to start to
buy rental properties. But again, it is not
passive because you have to work for it, of course. And so it’s transactional
again, so it’s like a paycheck. You’re going to have
to go out there and get more paychecks, right? Once that paycheck
is done, you better get out there and do another
one or you’re not going to have another deal coming in. So wholesale investing can
take on many shapes and sizes. You can be in between a
lot of different deals, as almost like a
finder’s fee on all kinds of different real estate
transactions, not just the one I described. So number three,
wholesale investing. And number four, and finally,
and my absolute favorite way to make money in real estate
is with rental properties. Buy and hold properties. If you ever go to a
real estate meeting– And I go to a lot of
investor meetings. You’ll look for the
old guys in the room. And I like to talk
to these guys who’ve been doing it for a long time. And you ask them if they had
to go back and do anything over again, what would
they do differently? And they’ll look at each other
and they’ll look back at you. And I guarantee the
answer that they’ll give you is, I wish I wouldn’t
have sold those properties. I wish I would have held
on to more properties. Because holding real
estate, for the benefit of increasing my net worth
and creating cash flow, is the ultimate
game in real estate. That’s why I do what I do. That’s why I’ve done all
of those other things. I have flipped a few
houses back in the day. I have done a lot
of wholesaling. But it all led me
to the main area of focus, which is holding real
estate for the benefit of cash flow. Holding multiple
properties– Imagine holding 10, 20, 30
rental properties that are all producing 7, 8,
$900,000 a month in cash flow. See how that looks? Right? Maybe $25,000 a month,
$30,000 a month in cash flow from tenants who are
living in my properties. Not only that, I’m getting
that cash flow every month from those tenants. I’ve increased my net worth
by adding a $50,000 home to my personal net worth. That’s what rich people
focus on, is net worth. Now I’ve got the net worth, I’ve
got the cash flow, and third and most importantly– Well, not third and
most importantly, but third on this list, taxes. Absolutely. Because I’m purchasing
rental properties in an LLC or another legal entity
as a business purchase, I then get to leverage those
purchases against my taxes. And my overall tax
burden is shattered because of rental real estate. So that paycheck that I
get from my 9 to 5 job is now offset by my
rental properties in my business entity
that purchased them. It’s a triumvirate. And there’s many, many other
reasons why I love buy and hold real estate investing. But just imagine being
able to go on vacation with your family. And while you’re on vacation,
on the first of the month you check your bank
account and you suddenly received 8, 9,
$10,000 in rent checks while you’re sitting there
on the beach with your family at Disney World or something. That’s what happened
to me recently. I was on vacation in
Scotland with my family. And we were there at
the time of the month when our rent checks would hit. And I open up my bank account. I said and my wife, this
is what it’s all about. This is what it’s all about,
creating passive income so we can do this with our lives. So those are the four main
ways, the four biggest ways, I think, to make
money in real estate. I’d love to hear your
thoughts about this. And if you want more of an
education on rental real estate that’s what we do
here on this channel. So we’ve got tons of
great resources and videos on helping you stake a claim,
get out there, and start investing in real estate. Everything from learning
what ROI means– everything from how you
can save on your taxes– how to get private money. All of those things we
teach here on this channel. Please go ahead and
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I just want you to get out there and take
action and become a real estate investor. It’s the best way. We’ll see you back here
next time everyone.

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