How to Live Off Real Estate. Stop Overspending and Start Saving

I have successfully invested in real estate through hard work but I was able to accumulate my cash by being thrifty with my money. Thankfully, today, as a real estate investor, I can support my family in New York City in a very nice lifestyle with the cash flow I receive from my investment properties. I feel blessed because as everyone knows, life in New York City is all too expensive.

But, as the expression goes “there is no free lunch,” my present success is the fruit of my effort but it came at a cost.

I spent my younger years living frugally, saving every penny I made to invest in real estate. For example, I lived in a cheap rat infested Greenwich Village Manhattan apartment on the sixth floor of a tenement walk up building that had hardly been renovated since it was built in 1880.

I also worked extremely hard. While I was in college, I spent my free time looking for opportunities. I walked around the city visiting properties, talking to brokers, landlords and tenants.

Additionally, I got ready for investing, obsessively educating myself about real estate, reading everything I could and learning from experts.

At first, I couldn't afford the down payment to buy a property. Instead I flipped apartment buildings in Brooklyn and Manhattan, completing twenty five successful transactions. When I saved enough money, I was able to achieve my dream of buying my first multifamily property in Manhattan. Since then I have continued to invest and I now own many properties free and clear.

BENJAMIN FRANKLIN FAMOUSLY SAID “WATCH THE PENNIES AND THE DOLLARS WILL TAKE CARE OF THEMSELVES.”

As a 30+ year member of the NYC real estate investment community, I have met numerous successful investors and landlords. Some of them live a simple lifestyle like me, saving their cash, waiting for the next opportunity. They taught me to always keep savings because a good deal can present itself at any time.

I think this is an important principle for all real estate investors to practice.

The American way of life is not conducive to this required financial discipline of accumulating savings. Only weeks ago, more than 145 million Americans spent billions of dollars in unnecessary items in just one Black Friday weekend.

As a result of impulsive spending, 1 in 3 Americans have no money saved for retirement. Even worse, a Federal Reserve Board survey found that 47 percent of Americans would need to borrow or sell something to cover an unexpected $400 bill. http://money.usnews.com/investing/articles/2016-05....

Always be aware that every expense reduces your savings pushing you further away from achieving your future goals. When you find you dream property, you will need the funds for the down payment, necessary repairs, closing costs and reserves

HAVE CASH SAVED WHEN THE ECONOMY IS BAD, AND BECOME RICH

In a recession, rich people become richer. In a recession, properties are cheap, mortgage rates are low but harder to qualify for and that is when even more people don’t have money saved. In those difficult times “cash is king." If you have cash when no one else does and if you invest it wisely, I can assure you of a golden future.

In 2008, America suffered the devastating effects of the Big Recession. Home prices plummeted 27.4 percent from their peak reached July 2006. The recession lingered through February 2012 after which home prices began to recover and are now 0.1 percent above the previous peak according to the S&P Case Shiller National Home Price index.

http://www.nytimes.com/aponline/2016/11/29/us/poli...

Imagine if you had been brave enough and had the cash to buy real estate on February 2012? How much more wealth would you have today?

SUSTENANCE TO SELF INSURANCE. GET RICH SLOW.

After a few years, I got married and we had kids. Expenses went up dramatically but so did my positive cash flow real estate net income. Rents have been rising and mortgage indebtedness declined through mortgage amortization. In conclusion, when I really needed the money, my real estate investment positive cash flow provided it.

Because I have always been a conservative person, I never took large and risky mortgages. I chose to get rich slow rather than to get rich quick. I even worked hard to pay down all my mortgages. This was completely contrary to the American life style. This was a long term strategy of self-sacrifice to save for tomorrow rather than spending it all paycheck to paycheck here and now. As a result, when the 2008 big recession came I was able to survive and continue with my life style.

When I was young, some people thought I was too cheap to enjoy life. I kept a modest lifestyle while my friends had expensive apartments, fancy cars and vacationed at extravagant resorts. Now that I receive my positive monthly cash flow coming every month and a secure retirement for the future, I feel very blessed. Maybe I don’t own the best pair of shoes and the newest shiny car, but I go to bed relaxed every night.