OK, I KNOW that I will get in a lot of trouble for this post. I had to leave the house before posting this because my wife is going to kill me…. so I may need a place to sleep tonight 😬😬
However, I am continuing the uncomfortable discussion about money and financial freedom. The discussions that are taboo to have because they make us feel uncomfortable. Apparently, making people feel uncomfortable is my new specialty 😊 So here we go.
A few weeks ago I posted about one of our most recent BRRRR deals and since then my inbox has been flooded and I have had several hundred investors, agents and Bigger pockets members reach out asking for help or advice. Many great conversations and I have had the privilege of meeting many amazing people. In addition to specific help requests regarding the BRRRR process, here are been some of the more common questions the kept coming up. Do we manage our rentals our self? How passive is passive income? What is the hardest part of being a cashflow landlord? What does actual passive income or mailbox money look like?
We do not manage our own properties. Your renal investment property is only as good as your property management team…. and if you are hiring yourself to be your property manager, you probably have a terrible property manager 😊. If you have a great investment property, but a terrible property manager, you actually have a terrible investment. If you have a good investment property with an exceptional property manager, you actually have an exceptional investment. PASSIVE INCOME TAKE A LOT OF HARD WORK….however, if you do it correctly, that work is up front within the first 6 months of purchasing the rental property AND your property management team can do the majority of the work for you. I call this the stabilization period. Like a kid, learning to ride a bike for the first time, it will be wobbly. However, once you get it, you get it. Once your property is stabilized according to your standards, then, it truly becomes passive income or mailbox money. Literally the hardest part of being a landlord of stabilized properties (if you have a rock start property management team) is scanning the physical checks for deposit every month. 😊
Mailbox money has mostly become app notification money as most landlord distributions are sent via direct deposit now, however we still have a few property managers that send physical checks every month. This photo is an example of that for this month. This property manager sends the check with a breakdown of every dollar that they had to spend on the property that month. They pay the bills. They handle tenant requests. Out tenants do not know who we are, and that is how it should be. If there is an out of the ordinary issue or larger than normal expense then the property manager contacts us for approval, but other than that they know our expectations and manage the property accordingly. However, it took work to build that relationship and create a mutual set of expectations before it became passive.
Everyone needs mailbox money. Everyone needs passive income. True passive income is SOOOO much more important that active income.
In a post about financial freedom, money and wealth, it may sound odd for me to tell you that money does not matter. But that is the case. Money truly does not matter. It is freedom that is most important. Oddly enough, those who do not care about, and who consequently do not focus on money, wealth and passive income are the ones that often must worry about money the most for most of their lives.
Those who focus intensely and intentionally on building passive income and wealth (for a period of time), will be the ones who will have the freedom to not worry or care about money. Until we have financial freedom by achieving our passive income number, we are never truly free. We are captive to our needs, our need for food, our need for shelter, our need for entertainment, our need for things, and ultimately, our need for employment (or active income) to be able to pay for our needs.
IF you are willing to put in the work to build, grow and create passive income, I would be happy to answer any additional questions that you have about the process or introduce you to the teams that I use who can help you get it done as well.
