002: Making Money with Your Eyes Closed
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You know, there are few things we love more than a good night’s sleep. 😴😴 It’s healthy, it’s necessary and it’s gotten even better once we discovered it can also make us money.
Yup! Making money while you sleep, aka passive income is the topic of today’s episode, and we are giving you all the tips and tricks you need to know about how to make money while you hit that snooze button. As two girls who ditched their 9 to 5 jobs by launching their real estate journey over 8 years ago, it’s safe to say that we’re kind of hooked on creating passive income to fund our lifestyle, dreams, and true freedom. 🙌
But first, let’s get to the bones of what passive income is. Passive income is money you earn through your investments or side hustles that aim to achieve a steady flow of cash without the daily commitment of a full-time job.
No, you’re not dreaming, that is a legit opportunity and it’s creating financial security and freedom for thousands of people every single day… and now that number can include you. Our favorite way to generate passive income is through multifamily apartment syndication, and in today’s episode, we will give you all the insight into how we started as two women who knew nothing about the real estate market and created an apartment syndication empire that allows us to build the lifestyle we want on our clock.
If you’re listening to this and you’re desperate to figure out a way to break out of your 9-5 and start spending your precious time on things and people that matter, this podcast is for you. Oh! And go back to listen to our first episode where we break down one of the biggest myths in the financial game: more time does not equal more money.
Okay so let’s break down why passive income matters. 😌😌
Be More Like Kylie
You ever see, Kylie Jenner chilling on her yacht or eating at Nobu at all hours of the day? It’s the secret the rich don’t want you to know: you can detach your ability to earn from the limited time that you have in a day. With passive income, you make money while you sleep. You also make money while you’re awake. 😉😉
Kylie Jenner is running an empire while her Instagram boyfriend, Travis Scott, is taking booty pictures of her out by the pool. And look, maybe your dream isn’t to take not-so-candid photos of yourself in your backyard. Maybe you just want to be able to afford a pool, and passive income can give you just that 〰️ allow you to earn money in your sleep and while sipping on mojitos, or playing with your kids, or traveling the world.
You know the term “golden handcuffs”? It basically alludes to how your corporate job keeps you where you’re at because they want you to believe time equals money, and if you stay all those late nights and keep at the quote-unquote “grind,” you’ll feel secure. Life is stressful enough, like has anyone turned on the news lately?… But you can avoid a lot of that burnout and stress with passive income.
In 2021, it was reported that 52% of Americans are experiencing burnout which is up from 43% who said the same in Indeed.com’s pre-Covid survey. If that’s not enough to make you rethink where you’re at in your career, maybe this will: 53% of millennials were already experiencing pre-pandemic burnout, and they remain the most affected population with 59% experiencing it today. Passive income allows you to do the things you love while avoiding burnout because you can make money to afford your lifestyle and goals without constantly needing to work for it.
You know who probably isn’t experiencing burnout? Kylie. Look, we love ❤️ a passive income queen and this girl has got it down to a science. Her lifestyle may seem extra extravagant, emphasis on the extra, but it’s not out of reach. At least, not fully. You can have the time to live the life you want while your passive income does the heavy lifting.
So here’s where the nitty-gritty of creating your own passive income begins. Like trying anything new, you need to identify your first step and in this case, that first step looks like identifying the asset class you want to pursue. There are many different forms of this, some popular examples include cryptocurrency, the classic stock market investing, and what we love to do: multifamily apartment syndication.
Now we have to ask you some questions when it comes to choosing the asset that best fits you, your lifestyle and your skillset.
First: How stable is the asset class? Look into the market, read the reviews of people who have gone before, and hello, listen to this podcast! And also be sure you check out the current trends and frustrations of the market on the asset you want to pursue.
Is it a tangible asset class 〰️ one you can physically see and touch? Apartments are huge buildings that are kinda hard to miss. Cryptocurrency? Not so much. Does that matter to you and are you willing to embrace the learning curve that comes with it?
Will it produce monthly or quarterly cash flow, or will it take much longer like years to see your returns? AKA: How fast do you wanna see those dollars roll in at a rhythm that fits your lifestyle? We know you got bills to pay!
Does it hedge against inflation? Back to the “is anyone watching the news?” point. Will this asset stand up to current economic patterns?
How fast will your money double in 5 years? This one is pretty self-explanatory. Unlike hoping for a 3% raise every year at your day job that basically just pays for inflation, understanding how much your money will increase over time with the investment asset you choose is crucial. ✅
Does it have extraordinary tax benefits? Let your asset of passive income give you a break for change when inevitable Uncle Sam comes knocking in just a matter of time.
What will get you on the next plane to Bali fastest? Okay this one is us but we are just excited for you to start dreaming about what your life will look like once your passive income self starts making some serious cash.
Apartment Syndication for All
Personally, we’re big on apartment syndication as our chosen asset for passive income and we’ll break down the pros and cons to give you a better understanding. When we started in 2018, we didn’t know of any other asset classes that are lower-risk investments, provide above-average returns, and of course, bring massive tax benefits while cash flowing.
However, the biggest thing you’re gonna have to let go of when it comes to this chosen asset is your control issues. Shout out to all our type A’s out there.
Though some investors welcome a “hands-off approach, this is NOT the case for everybody. Additionally, your capital can become illiquid until the apartment complexes are sold. Even in the case of an emergency, it is unlikely that you’ll be able to withdraw any funds that you have already invested into the deal. Plus, holding time for each deal, typically a 3 to 5-years hold, can be a drawback for some investors.
Like anything, you have to weigh the pros with the cons. What’s that old saying? No risk, no reward? The next step will be to choose your market and make sure you’re choosing the hottest one to invest in. Luckily for you, we did a lot of the backend work to give your risk a safety net with 5 little-known markets to invest in and 5 to avoid. You can check them out on today’s show notes on the podcast page of our website.
For example, our favorite place to invest in is Dallas Fort Worth, Texas. Not only do they check all the boxes when it comes to investing in the markets we love, it also out beats other markets in rent collection, down only 0.06% during the pandemic.
So what exactly are the checkboxes we’re referring to? For us, they’re in the form of a series of questions that help us decide areas to bring our investments to, including…
What geographic location do you want to focus on? Yeah you may love a great girls trip to Miami or think New York is the place to be. But that doesn’t necessarily mean they’re the best locations to invest in. When it comes to real estate, location really is everything. Especially to your bank account.
Is there job growth? 2021 has proven to be one of the most insane years when it comes to the job market. And now that so many workplaces are remote, people are realizing they can go just about anywhere, so where are they going and how can you get in on that?
Is there population growth? Where are the people making the babies! Or rather, where are they flocking to find people to procreate with and start lives of their own?
Is there a net migration? Net migration is the number of immigrants minus the number of emigrants, including citizens and noncitizens. Are people from places around the world settling into a certain state or region in a state?
What are the main economic drivers? Tech? Finance? Manufacturing? Energy? Medical? What are some of the most up-and-coming places that are bringing a steady source of growth to their economies?
These questions will require you to do some digging and see what locations are up-and-coming to ensure that your investments don’t come back empty. We want thriving cash flow straight to your pocket and into the life you want.
Choose Your Fighters
Okay, so we got the basics down. Why passive income matters and the ins and outs of the assets and markets you need to research to make sure you’re coming out on top. So what’s next?
Great question, your TEAM is what’s next. ✨ Oh, did you think you were doing this alone? We got you pumped up with the numbers and opportunity, and now comes the most crucial step, identifying a group of people to come alongside you and invest with you that you can trust. We like to call them a sponsorship team.
Why is this so important? Because we don’t know it all and having people on your side can really add value to your investments and can provide insight that maybe you had not considered before.
Yes, we know understanding the math, the deal structures, the fees, and doing your due diligence are all important components that would likely allow you to win this game, and that is more than half the battle. But your sponsorship team will help you get to that 100% mark.
You might be thinking 〰️ Where can I find such people to support, grow and ask these questions to?
Well, it’s like we thought of everything to set you up for success. Join the Kitti Freedom Club, a passive investors club for ordinary people at thekittisisters.com/podcast to start your passive income journey today!
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