Multiple Streams of Income
Hi, this is Robert Woodruff with “The Keys to Cash flow” & President of the Charleston REIA. Today I’d like to discuss something that helped me bail myself out of a mess that I had created as a new investor. This information kept me from losing a dozen houses that I acquired using No-Money-Down strategies taught by Guru’s all across the country. As I will explain later, I also utilized multiple streams of income to increase my monthly cash flows and achieve my financial freedom.
What most investors do not realize, the more properties you acquire, the more money you need to pay for them. Rental properties are bound to open-up. Meaning, your tenants will eventually move out or even stop paying you. It doesn’t matter how much equity you have in each property. If you don’t have enough money in the bank to fund at least half of them opening-up at the same time, you risk losing everything you worked so faithfully to acquire.
Here’s the question you should ask yourself, “If you have $30,000 in equity in a property and cannot make the payment, is this property an asset or a liability?” (The Answer: Liability)
If you find yourself in this precarious situation, as I had, you only have 2 options. The first is borrowing money and going deeper into debt. This option is not very responsible for a real estate investor. The alternative is the only responsible way to bail yourself out; to increase your cash flow thru multiple streams of income.
Multiple streams of income are earnings that comes from multiple sources. If one source stops paying, you have the other sources to rely upon. This would be comparable to ‘not putting all your eggs in one basket’. Your job would be considered a source, so would rental properties (IF, your income is greater your expenses). Having more than one stream of income helps you to achieve your financial independence. If you use multiple streams of income to build cash flow, you may be able to quit your regular 9-to-5 job.
I learned multiple streams of income when I was a door-to-door salesman for ADT. I used my phone often as well as drove to appointments. It wasn’t long before I noticed that I had the ability to sell more products throughout my day. Upon becoming a real estate investor, I once again applied this very same philosophy with tremendous success.
Below, is a list of several different streams of income that you can use to either bail yourself out of a mess and/or achieve your financial goals quickly.
For starters, I knew a guy who worked for a company that paid him $50.00 for each broken windshield that he had replaced. After finding someone with a broken windshield, all I had to do was call their office and schedule their technician to install a new windshield. So I did it. They gave me some cards and a telephone number for the office and I was on my way. If I had time prior to a sales appointment, I’d simply drive through a large parking lot and look for windshields. If I found one, I could easily make $50 Dollars in less than 10 minutes. Not bad. It wasn’t difficult to make an additional $2-300.00 per day by simply adding this stream of income to an existing outdoor sales job.
The next stream of income I had been able to use was signing people up for phone service with a smaller phone provider. As I was selling someone a security system, I’d simply ask them what they were paying for phone service. If their rate was high, which I could easily discover when they showed me their phone bill, I would sign them up for a new phone service plan. I would be paid an upfront fee of $50 for signing them up, then, got a small residual amount each month as well.
Multiple Streams of Income can come from nearly anywhere. You can buy and sell almost anything to increase your income. The trick to having multiple streams of income is to choose streams of income that coincide with each other. If your main source of income involves being on your cell phone and selling all day every day, then any other work that involves those similar actions can easily be incorporated into your day.
Another great stream of income stream is achieved by marketing. After becoming a real estate investor, I quickly realized that I could buy and sell nearly anything by simply dealing with motivated sellers. Motivated sellers are people who want out fast. Some will even give you their property, if you’d take it. In order to find motivated sellers, you must first learn how to advertise & market for them. Once you figure out how to find motivated sellers, you can find motivated sellers of nearly anything. (Piano’s, ATVs, Jet skis, Boats, Cars, Trucks, Heavy Equipment, Planes, Antiques, RV’s, Mobile Homes, Houses, etc.) Locating motivated sellers “has and always will be” the best way to get the BEST deal on anything. Buy low then sell high Craigslist or eBay. Piece of cake!
Another way to generate income is to simply solve motivated sellers’ problems. You don’t even need money to do this. All you need to do is advertise on Craigslist to find them. Once you’ve heard their problem and how little they will sell for, merely tie-up the property and sell it to an end-buyer for retail price. You could also sell it much faster to an investor for wholesale price. This technique applies to nearly anything that can be bought or sold.
The following is the income stream that I used to bail myself out of the mess I had made by acquiring too many No-Money-Down deals on houses. I used my new advertising savvy to run adds in the service section of my local newspaper. The ads cost me $125.00. All I had to do was get one job to pay for the whole month. I ran ads for both electrical and heating and air-conditioning work. When customers replied to my ads, I simply acted as the secretary fielding the call for the company. I assured my caller that I would send someone out immediately to fix their problem. I would then call an electrician or hvac technician who I knew wanted extra work on the weekends or even during the evening. I would supply the material cost and the business lead, all they had to do was bid the job, complete the work, and bring back a check. There was no need for any type of licensing or pulling permits because we only did repair or replacement work. Replacing someone’s’ air conditioning condenser usually meant that my tech and I would both split the profit of $1,000 Dollars. Since my tech could replace 2 per day. I made an extra $2,000 every weekend. Check with your states guidelines. (This stream of income can be used with most any other type of service as well.)
I used this last income stream in order to bail myself out of a mess I had created by acquiring too many “no money down” deals on houses. But once I had bailed myself out of the mess, I then used this excess income to help build massive passive monthly income by investing in low-risk assets. I bought small parcels of land, RV’s, Mobile Homes, and even a few vehicles. Each asset was created into a note in which someone had to pay me a monthly installment. If they stopped paying, I got the asset back to do the entire process over again.
By applying this extra income stream to my multiple streams of income, and then applying it towards low-risk investments, I was in a position to create a monthly residual income of $6,000 dollars within 24 months. That’s $72,000 dollars per year without ever having to get-up and go to work in the morning. I was able to achieve such a feat because I used multiple streams of income.
***If you’d like to know more concerning topics like this, or would like to know more about Robert, you may also visit him on Facebook. http://www.facebook.com/#!/RobertWoodruffInvesting