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You are low on time, or have no interest in a big operation, but are willing to invest into an automated system that will provide cash flow.
Starter Blueprint
Empire Builder Blueprint
Passive Investor Blueprint
Welcome, Passive Investor!
Based on your results, you're likely a long-term thinker that values CASH FLOW more than anything.
You also don't have the time or patience for a giant, high volume, high maintenance business.
So you want something SIMPLE that can grow with minimal oversight.
I hear ya...passive income is what helps me sleep at night too.
You DO have the patience to delay gratification...building a portfolio for the long term.
You're willing to sacrifice today for a better tomorrow, and to build wealth instead of get rich.
Truthfully, you're a REAL "Real Estate Investor," because you are buying and KEEPING assets.
Those quick flip guys are just trying to be as cool as you by calling themselves "Investors."
What follows is the "80/20" playbook for setting up this type of business.
Here are the different sections:
Throughout each section, we'll also answer the question:
"What tool do I use?"
To capture each tool we recommend and what it costs, we created a spreadsheet, which you can use to map your total budget.
Just go to the appropriate tab...and it's got literally everything you need and all the tool links referenced below.
Ready to make some passive income!? Let's begin...
Does that sound about right?
If you've never DONE a real estate transaction before, I recommend peeping over at the STARTER business setup.
There, you'll find simple strategies, resources, and courses for doing your first transaction.
Expect to stick with the strategies below for a minimum of 3 months before expecting consistent results.
Expectation management is critical so you do NOT get disappointed.
But do NOT give up after 30 days, 60 days, or really even 90 days.
Persistence is key in this business, and separates the winners from the losers.
Remember, not every home-owner you speak with needs to sell immediately.
It takes followup, and consistent touches with existing leads and new leads to produce motivated sellers.
Luckily, I'll share various services and tools to buy back more of your time from all this, so you can focus on growing your portfolio and cashing those recurring checks.
Spending your money and time on the 20% that will produce 80% of your results is the name of the game here.
Let's get to it!
To begin, you must choose your numbers.
Starting with Cash Flow:
By this time next year, how much do you NEED to make per month in order to cover your monthly expenses, fund your IRA, HSA, your child's college fund, your vacation fund...etc.
Is it 20K? 30k? 100K?
Make sure it's realistic and attainable.
Got it?
Now let's do Net Worth.
How much do you want to be worth on paper in 12 months?
$1M, $2M, $100M?
Sometimes our ambition can lead us into a business that controls us.
A business that consumes our lifestyle, instead of enable our IDEAL lifestyle.
Let's not forget why you've ventured into real estate...
It's OK to aim for realistic and attainable at first. Eventually you'll hit that goal, and set a new one.
Your goals in 10 years might seem wild to you now (hopefully they are!)
But for now, let's focus on the next 12 months.
So, decide on how much cash flow you want per month, and what you want your net worth to be.
Next...let's reverse engineer that.
The goal here is to determine how many houses or deals you'll need to acquire to hit those goals.
Example: Let's say I need $10k/mo and a $1M net worth.
For simplicity sake, we can assume each house can bring $400/mo, which means I'll need 25 of those.
If I can buy the houses at enough of a discount, then I can create $40,000 in equity per house...which would put me at the $1M net worth mark.
So 25 deals is the number to hit!
You get the idea.
**This section is an excerpt from The 8020 Investor Academy, our online training and mastermind about systemization.
(Learn more about our Academy and apply here)**
As an active investor, If you have no target...you'll never hit one!
Before spending a bunch of money on systems and campaigns...get specific about the outcome you want.
To help you create a CLEAR intention for your business goals, down to the KPIs you need to hit, we created a fancy spreadsheet.
DOWNLOAD THE FANCY GOAL
SETTING SPREADSHEET
Some tips: Use current known numbers. If you don’t have anything recorded, well it’s a good thing you’re taking this training!
Make a guesstimate. You need a baseline to grow upon. For now, we do this exercise so you can begin to re-arrange your decisions with these numbers as the filter.
As a Passive investor, you are optimizing for CASH FLOW.
This means that the quick-turn strategies like Wholesaling or Rehabbing won't be your bread and butter.
However, you can still decide to DO those exit strategies if the property doesn't fit your portfolio criteria.
Check out the Lean Flipper Guide to go down that route.
For now, the following strategies are good starting points to your cash flow empire.
PRO TIP: Pick ONE strategy and stick to it until success. Every time you switch strategies before succeeding, a baby Koala dies (and you lose momentum and lower your chance of success. It's affectionately known as the "shiny object syndrome")
We recommend you begin with a simple BRRRR strategy.
This will be your fastest path to cash flow.
Buy>Rehab>Rent>Refinance>Repeat
While this is a simple strategy, it's not easy.
Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple
How to Invest in Real Estate Using the BRRRR Method
This is an extension of the BRRR strategy, but with a few tweaks.
If you're seeking above-average returns, vacation rentals can make you up to 4 times as much as traditional long term tenants.
It just requires a bit more work because of the frequent turnover.
If you're looking for a strategy that:
Then creative financing as your exit strategy is for you.
It's all about using TERMS (price, downpayment, monthly payment, length of term) to structure a win-win for you and the seller.
As the coach Blair Halver puts it,
You're not a wholesaler, you're a transaction engineer.
Here's the most popular methods:
What it is: Instead of bank financing, you can buy a house through installment payments to the owner.
Benefits: No banks, you can pay higher price and negotiate favorable terms, you can even negotiate deferred payment, you can assign these like hotcakes to an end buyer for a quick profit.
Cons: They're a bit harder to find, but like anything else in this business...it's a numbers game. Start with a high equity landlord list.
What it is: Instead of getting bank financing or coming. up with cash, you can buy a house simply by taking over the existing mortgage payments.
Benefits: No-money-down, no credit needed, the mortgage stays in owners name, and unless the seller needs cash upfront, you can acquire title to property basically for free! This is the beauty of negotiating on TERMS vs. just price alone.
Cons: When title transfers, technically banks can ask for all their money back at any time because of the "due on sale" clause. It's extremely rare for them to do it though...because banks HATE owning properties, they just want the cash flow. Luckily, there's ways to solve the problem if it does happen to you.
What it is: Also known as "rent-to-own," this strategy is best used when selling to an end buyer that has cash for a big downpayment, but can't get a bank loan.
Benefits: CASH NOW>CASH FLOW>CASH LATER.
If you can lock up a deal sub-to with no money...imagine how cool it'd be to sell to a "tenant-buyer" that will pay you a large 5-figure downpayment, a monthly rent payment higher than your existing mortgage payment...and a BIG backend sale you can profit on.
See video below for examples...
Cons: You need to screen a lot of tenant buyers to find the right fit, but they are out there! And this can be outsourced.
I recorded a video with Blair Halver running through several deal examples.
Here it is for free:
I'd recommend attending Blair's training on creative financing.
His program literally GUARANTEES results or you get your money back (nobody else offers this).
He shows you
It's a no brainer, and it get's our full stamp of approval...check it out.
Make sure to have a great attorney before doing these deals.
Oh...do you need one? Each state has different laws, so Blair told me I could share his master US recommended attorneys for each state.
Here you go: Blair's Epic State-by-State Lawyer List
We'll dig into more team members you'll need as a Passive Investor later on...
We can't talk about passive income without mentioning Commercial.
It's the source of countless millionaires. Here's a few reasons to consider looking into this:
While we are not commercial real estate experts, we can point you in the right direction.
One of our most popular interviews is with David Bokman, who wholesales commercial real estate. Watch this for a nice intro to this strategy:
For the most modern and QUICKEST approach to amassing a large monthly cash flow, I'd follow a guy named Tim Bratz.
His podcast, The Legacy Wealth Show, outlines how he's build a 9 figure net worth with commercial real estate in just a few years.
The path that many investors do is to START with single family houses, systemize that business, and then begin to foray into Commercial once your business starts to run on its own.
We'll show you how to do that :)
Now that you've decided what STRATEGY to pursue to monetize your opportunities, let's dig into different ways to GENERATE those opportunities.
Leads are the lifeblood to your business, so you'll want to get this up and running as soon as possible.
Then, you'll want to get it off your plate so you can focus on doing deals.
As I said for picking the strategy: Pick ONE method and stick to it until success. Every time you switch strategies, you lose the chance to see results, build momentum, and learn how to improve your lead generation.
Be Scientific
Try something, test results, and tweak until successful. Marketing is like a science experiment. You don't know what's going to work well for YOUR business until you try something, and continuously optimize the results.
The biggest reason investors fail is they simply don't do enough lead gen...
Inconsistent marketing is the death blow to most investors
The following are the most "lean" ways to get leads in the door that we know.
They are also the easiest strategies to systemize for consistency.
Remember:
ALL OF THESE STRATEGIES WORK!
You just need to CONSISTENTLY execute. I'm giving you the "80/20" to get these up and running as fast as possible.
Alright here we go...
Sometimes the best way to be "Consistent" about an area of business is to outsource the entire department.
Yes, you can also just pay someone to send you leads.
It will cost you...but it'll cost you MUCH less then what your time is worth.
So I recommend doing this so you can completely outsource your worry about lead generation.
Here's our top 3 recommended vendors, in this order:
They will help you determine your target, pull your lists, and run your entire prospecting system with their team. Email matt@moontowerpropertysolvers.com and mention InvestorFuse to learn about their investor packages.
This is run by a small team, and they promise to deliver 30-60 qualified leads per month. Email Jordan at vibrationsmediallc@gmail.com for the best pricing.
They'll use a fancy, software driven multi-touch system to generate a ton of leads. Costs $2000/mo for the managed service. They are busy, though I'd reach out to see if your market is available for them to start prospecting for you.
Did you know that over 90% of ALL HOME SALES are from real estate agents listing properties on the MLS?
You can't deny, we're still in a real estate agent world, and they can be an investors best friend.
What if there was a way to source OFF-MARKET deals from them, before they hit the MLS?
This is called "Pocket Listings,"
And my friend Kyle Nolan Good teaches investors how to build relationships at scale to keep your funnel (and pockets) filled.
Watch Kyle's FULL WORKSHOP here
This free training covers
Yes...you won't need to talk to agents on the phone for this to work.
And...you can hire someone whose full time job is to source deals from agents.
This is a great starting point if you're lower in budget...
but let's get some simple paid lead gen systems up and running too.
Ahhh cold calling. Most investors have a love, hate relationship with this one.
Much like texting, it requires HIGH VOLUME.
You (ideally an outsourced team member), needs to do a LOT of dialing.
Rough numbers we've seen across the board:
You must contact 100 leads in order to generate a contract.
I shot a video to show you how easy it is to get a cold calling campaign going. Just use Call Reps, not the company I referenced in this video, which is slightly dated.
If you have a bit more cash to invest...try the following strategies:
With direct mail, you are answering the call from someone who wants to talk to you
vs.
Cold calling...where at first they do NOT want to talk to you.
Pyschologically, you're in a great position when you answer these calls live.
I like how direct mail campaigns can be broken down into hard stats:
2500 mailers sent per month
2% of those leads called
20 of those were qualified leads
1 offer was accepted.
Etc.
Like every other form of lead gen, this is a numbers game, and your success ratio goes up the LONGER you mail a list.
And expect to put some serious cash behind your direct mail.
You're gambling if you expect to pull a deal with only $500/mo budget.
You want to be spending at least $2000/month on mail, which will allow you to mail around 4500 owners.
Luckily, there are services that do ALL of your direct mail for you.
You set it up once, upload your list, and they take it from there.
Here's the best one:
They have an extensive library of templates to choose from.
They have near rock bottom prices (mention InvestorFuse for best deal).
I suggest speaking with their amazing sales team.
They'll help you make all decisions, and have your best interest at heart.
Their leader, Andy Detwiler did a training on best practices for our members. You can watch it here.
Why use CallRail?
There's a lot of misinformation about online marketing for real estate investors.
I'm. here to set the record straight for you.
If you have a website, you need to drive traffic to it if you want it to make you money.
You'll be driving traffic one of three ways:
They call it "Pay-Per-Click" because the ad system is essentially a bidding system.
You are bidding for clicks to a certain audience or keyword you target.
Assuming you have a higher marketing budget, here's why I love PPC:
Pros
Cons:
It costs a lot of money to get it going.
At the high end, Greg Bilbro, CEO of GEOFlip, a company that does this for investors, recommends spending minimum $5k for 5 months to get the BEST results.
Stephanie Better, a Facebook ads specialist, recommends at least $2,000/mo to start getting a consistent flow of Facebook leads.
Why? Again, you need to collect a lot of "data" around which ads get clicked by who.
Also, this works best if you're targeting a large market or city. You need enough eyeballs for it to work. Don't go this route if you're targeting tertiary or rural markets.
HINT: DON'T DO THIS YOURSELF.
Unless you genuinely enjoy PPC algorithms, leave this to the pros and stay focused on monetizing the leads it produces.
For Google PPC:
Most services charge up to $2,000/month to manage your ads full time and send you reports.
That's in addition to your adspend. We suggest a minimum $2,000 per month for at least 6 months.
Our favorite Google PPC Done-For-You Services:
For Facebook Ads
Our Favorite Facebook Ads Services:
For $997 bux, Blair shows you how to setup a NATIONAL Facebook ad campaign, gives you all the templates, shows you how to use the system, and then shows you how to do creative finance deals to make big profits virtually, no matter what market the lead comes from. By targeting the whole country, you can get spend as little as $5-$6 a day to get a steady stream of leads.
So, check out that course if you want to do it yourself.
Website
In the meantime, you should setup your website so you have a web presence.
Look no further than Carrot, a done-for-you pre-built investor website that naturally ranks in google with ZERO work on your part.
Get A Carrot Site Here for Under $70/mo
Here's a training from Trevor Mauch, their CEO, about how best to use a Carrot site and make it your own. (This is a clip from our Modern Marketing Masterclass)
Generating opportunities is only half the battle.
CLOSING them is where the money is made.
Even though you're keeping the deals for cashflow...I recommend THINKING like a wholesaler.
You want a process for filling you portfolio, and not relying on chance.
Here's the big advice on a bumper sticker:
He/She with the best follow-up system always wins...
This is what your Conversion system should look like:
Until now, we've only just built the arm that drops houses into a funnel.
Why is it important to have this as automated as possible?
Here's two VERY BIG reasons:
But don't just trust the data...trust your common sense.
Not every seller needs to sell the moment you talk to them.
Some leads take YEARS of nurturing before converting to a deal.
Our colleague Christina Krause did a 3 year study that showed that 75% of her client's deals came from followup 30 or more days after the initial contact.
Of her clients with NO follow-up system...only 8% of their deals came from followup...
Don't Waste Your Marketing Dollars!!!
Now it's time to build a funnel that uses all of the best practices of lead conversion.
Enter, our sales system:
IF3.
Think of IF3 as your Lead Conversion System. Here's how it works:
Without an automated system like IF3, you're staring at countless hours of mundane work:
Our tool gives you a simple process for this, so you don't have to re-invent the wheel.
Plus, it makes it easier to hire someone to run without much training.
Learn more about our Lead Conversion System here.
Alright, now that you've selected your strategy, started generating leads, and setup your sales system...
It's time to setup your operation and plug in a team to run your Passive Investor business!
To get a team up and running, you'll need to hire at least one Virtual Assistant to help you manage leads.
There's a few ways to skin the cat.
This video will help you determine the best structure for your team:
Look no further than Rocket Station VAs.
They are pre-trained for real estate lead management related tasks .
(as well as other basic admin functions)
The coolest thing about them:
When you sign up, they will help map out the processes your VA will be doing for you.
That way there's complete clarity and you ensure that they know exactly how to execute.
They cost $10/hour.
To request a VA, book a call with Rocket Station and mention InvestorFuse for the best pricing.
Other tasks they can help with include:
The goal with your Funnel Team is to tee you up with qualified, motivated sellers you can buy from.
If doing the negotiating is not your cup of tea, you'll need to hire a specialist:
Hiring Acquisitions managers is an art form, but when you get this right, you'll have closers literally MAKING YOU MONEY without you needing to talk or haggle with a single seller.
In order to attract the best closers, you need to have the system up and running, as we've described...
AND the volume of leads that will feed them enough appointments.
One of our friends Todd Toback has hired dozens of Acquisitions managers in his career, and we interviewed the best practices for how YOU can do this for your business.
One of the best investments you can make as a Passive Investors is a U.S. based Executive Assistant that can be your right hand.
They can help you:
It's one of those roles that you didn't know how bad you needed them until you've hired them.
Best of all, you can find a great Executive Assistant that is U.S. based for under $20/hour.
We recommend using our friends' service:
They will help you find and implement your E.A.
Mention InvestorFuse for the best discount on their placement service.
Since you'll be keeping these properties and renting them to tenants, you'll need to renovate them.
Obviously, you should look for minimally damaged properties to simplify the process.
But either way, you'll need to deal with contractors. Here's some advice.
- Buy houses build AFTER 1960. The key is to defer maintenance with a really well built house (and appliances).
- Finding a great contractor is about HONESTY and FINANCIAL STABILITY.
If you find both of these qualities stand up to a high caliber, you've got a great contractor!
- You don't want to be nickled and dimed or given a price that's "too good to be true" <
- Never underestimate the power of human desperation. Work with a contractor that is well off already.
- Ask other investors for a referral. This will be your best way to source.
- Go to Home Depot when they open early in the morning, and meet contractors as they come in to pick up materials for the day.
At first, you'll want to manage the properties yourself, until it starts to "hurt," meaning it takes up more time than you'd like.
Resources
When it comes to hiring property managers, refer to the above advice on HONESTY and FINANCIAL STABILITY.
Your best bet is asking for referrals here as well.
Attend local landlord meetups and interview as many as it takes to find someone that is honest, and not hard out for cash.
Tools
Cozy: Extremely user friendly property management system. Best of alll...it's FREE!
You don't need anything fancier than this to start. Once you grow, you can use more advanced systems like Buildium.
I hope this guide gave you the essential strategies and tools to start making the income you need to live your dream Passive Investing lifestyle.
If you've read this far, you have the capacity to do this.
The only way to fail is to stop.
Everything else is just an outcome...and you will learn by taking action.
If you want help and accountability alongside other ACTIVE real estate investors,
Apply For The 80/20 Investor Academy.
You'll get 35 hours of additional training, and meet twice a week with us to ensure you have a clear path forward every day.
Apply and we'll get to chat one-on-one about your goals.
Now, go and get what's yours.
-Dan Schwartz, CEO, InvestorFuse
