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The overwhelming majority of people will work for the bulk of their lives. That’s because, for most people, their income gets cut off the second that they stop working. Once they stop working, it’s just a matter of time until their expenses catch up with their savings. Granted, if you work hard and prepare adequately then you have a chance of retiring in your later years.

 

But what if there was another way? What if you didn’t have to spend the bulk of your life working? Well, we’re here to tell you that there is another way.

 

Let’s examine how you can achieve financial independence with real estate.

What is Financial Independence?

Investopedia defines financial independence as “when you can live the quality of life you desire without having to work any longer.” In other words, financial independence is when you have enough passive income to pay your expenses.

 

Imagine that you got a check in the mail each month for $100,000. This would be plenty to cover your rent/mortgage and all of your basic living expenses. Regardless of what you did all day, that check came in the mail on the first of the month. This is what financial independence is like.

 

The key to financial independence is generating passive income. As the name implies, passive income is money that you earn without having to work. Unfortunately, it’s not quite as simple as getting a free check in the mail. Passive income is typically earned by investing money into three main assets:

 

  1. Equities (stocks/bonds)
  2. A business
  3. Real estate
  4. Commodities (oil, gas, gold/silver, etc)

 

When you invest in these assets, they will almost always create some type of cash flow for you. For example, stocks pay dividends, a business produces revenue, and real estate provides rent payments.

 

Once you have enough cash flow from these assets to cover your expenses, you will no longer be required to work. At that point, you will have achieved financial independence.

 

All three of these assets will work when trying to reach financial independence. But, there’s one that we want to focus on in particular.

Why Real Estate?

There are dozens of reasons that investors consider real estate to be one of the most lucrative asset classes. You can remember them by using the acronym I.D.E.A.L.

  • Income: Real estate can generate passive rental income, which is not subject to medicare or social security tax.

 

  • Depreciation: It’s possible to legally report a loss on your properties while still making positive cash flow. There are many other tax advantages to owning real estate (such as a 1031 exchange) but that is beyond the scope of this article.

 

  • Equity: With real estate, your tenant pays off your debt for you while your equity in the property builds up.

 

  • Appreciation: In addition to its income potential, real estate tends to grow in value over time. This provides investors with two different returns.

 

  • Leverage: With real estate, you can use a relatively small amount of capital to buy much more expensive properties. This concept is called leverage and it can help amplify your returns.

That said, let’s discuss how you can actually get started investing in real estate.

Using Real Estate Investing to Achieve FI

There are dozens of ways that you can get started investing in real estate. For the sake of this article, we are going to focus on two real estate investing strategies that you can use to achieve financial independence.

 

The first strategy is to source your own deal. This involves finding a property that you want to buy, conducting due diligence, acquiring funding, and closing the deal. Needless to say, this strategy is fairly in-depth. The responsibility is on you to make the deal happen and ensure its profitability. For new investors, this strategy can be a little bit intimidating.

 

The second strategy for using real estate to achieve financial independence is to invest in a real estate syndication.

A real estate syndication is when a group of investors pools their money together in order to purchase real estate. This is a great strategy for people who want to get started investing in real estate but don’t want to do the work of buying and managing a property themselves. In a real estate syndication, there are two main parties:

  1. The Syndicators or General Partners: This party is responsible for operating the syndication and its properties. They are in charge of underwriting the deal, performing due diligence, negotiating with the seller, finding investors, raising capital, working with the property management team, investor relations, and more.

 

  1. Passive investors: This party is responsible for performing due diligence on the general partners. Their biggest job is to determine whether or not they should invest money with the general partners. If they decide to invest then their role within the syndication is largely passive.

There are pros and cons of each role within a syndication. For example, a general partner has a lot more control when it comes to influencing the direction of the syndication. But, on the other hand, the passive investor gets to enjoy the benefits of real estate investing with little work.

 

For newer investors, a syndication is a great way to enjoy the benefits of owning real estate without having to do all of the work that’s usually required.

 

At the end of the day, there are plenty of reasons that you should get started investing in real estate. And, the sooner that you start investing, the sooner you’ll start on your path toward financial independence.

 

We hope that you’ve found this article valuable when it comes to learning how to achieve financial independence with real estate! If you’re interested in reading more, please subscribe below to get alerted of new articles as we write them!

 

Sachin Maskey is a physician, real estate investor, philanthropist, and entrepreneur. He has over 17 years of expertise in the medical industry as a family medicine specialist. Outside of medicine, he is the founder of the commercial real estate investment firm Avatar Equity as well as the Dhana Yoga Foundation. You can follow along with Sachin on Instagram, TikTok, Facebook, and LinkedIn.

Understanding Real Estate Classes: A, B, and C

How To Achieve Financial Independence With Real Estate

The overwhelming majority of people will work for the bulk of their lives. That’s because, for most people, their income gets cut off the second that they stop working. Once they stop working, it’s just a matter of time until their expenses catch up with their savings. Granted, if you work hard and prepare adequately then you have a chance of retiring in your later years.
But what if there was another way? What if you didn’t have to spend the bulk of your life working? Well, we’re here to tell you that there is another way.
Let’s examine how you can achieve financial independence with real estate.

What is Financial Independence ?

Investopedia defines financial independence as “when you can live the quality of life you desire without having to work any longer.” In other words, financial independence is when you have enough passive income to pay your expenses.

Imagine that you got a check in the mail each month for $100,000. This would be plenty to cover your rent/mortgage and all of your basic living expenses. Regardless of what you did all day, that check came in the mail on the first of the month. This is what financial independence is like.

The key to financial independence is generating passive income. As the name implies, passive income is money that you earn without having to work. Unfortunately, it’s not quite as simple as getting a free check in the mail. Passive income is typically earned by investing money into three main assets:

  • Equities (stocks/bonds)
  • A business
  • Real estate
  • Commodities (oil, gas, gold/silver, etc)

When you invest in these assets, they will almost always create some type of cash flow for you. For example, stocks pay dividends, a business produces revenue, and real estate provides rent payments.

Once you have enough cash flow from these assets to cover your expenses, you will no longer be required to work. At that point, you will have achieved financial independence.

All three of these assets will work when trying to reach financial independence. But, there’s one that we want to focus on in particular.

Why Real Estate ?

There are dozens of reasons that investors consider real estate to be one of the most lucrative asset classes. You can remember them by using the acronym I.D.E.A.L.

• Income: Real estate can generate passive rental income, which is not subject to medicare or social security tax.

• Depreciation: It’s possible to legally report a loss on your properties while still making positive cash flow. There are many other tax advantages to owning real estate (such as a 1031 exchange) but that is beyond the scope of this article.

• Equity: With real estate, your tenant pays off your debt for you while your equity in the property builds up.

• Appreciation: In addition to its income potential, real estate tends to grow in value over time. This provides investors with two different returns.

• Leverage: With real estate, you can use a relatively small amount of capital to buy much more expensive properties. This concept is called leverage and it can help amplify your returns.

That said, let’s discuss how you can actually get started investing in real estate.

Using Real Estate Investing to Achieve Financial Independence

There are dozens of ways that you can get started investing in real estate. For the sake of this article, we are going to focus on two real estate investing strategies that you can use to achieve financial independence.

The first strategy is to source your own deal. This involves finding a property that you want to buy, conducting due diligence, acquiring funding, and closing the deal. Needless to say, this strategy is fairly in-depth. The responsibility is on you to make the deal happen and ensure its profitability. For new investors, this strategy can be a little bit intimidating.

The second strategy for using real estate to achieve financial independence is to invest in a real estate syndication.

A real estate syndication is when a group of investors pools their money together in order to purchase real estate. This is a great strategy for people who want to get started investing in real estate but don’t want to do the work of buying and managing a property themselves. In a real estate syndication, there are two main parties:

The Syndicators or General Partners

This party is responsible for operating the syndication and its properties. They are in charge of underwriting the deal, performing due diligence, negotiating with the seller, finding investors, raising capital, working with the property management team, investor relations, and more.

Passive Investors

This party is responsible for performing due diligence on the general partners. Their biggest job is to determine whether or not they should invest money with the general partners. If they decide to invest then their role within the syndication is largely passive.

There are pros and cons of each role within a syndication. For example, a general partner has a lot more control when it comes to influencing the direction of the syndication. But, on the other hand, the passive investor gets to enjoy the benefits of real estate investing with little work.

For newer investors, a syndication is a great way to enjoy the benefits of owning real estate without having to do all of the work that’s usually required.

At the end of the day, there are plenty of reasons that you should get started investing in real estate. And, the sooner that you start investing, the sooner you’ll start on your path toward financial independence.

We hope that you’ve found this article valuable when it comes to learning how to achieve financial independence with real estate! If you’re interested in reading more, please subscribe below to get alerted of new articles as we write them !

About the Author

Sachin Maskey is a physician, real estate investor, philanthropist, and entrepreneur. He has over 17 years of expertise in the medical industry as a family medicine specialist. Outside of medicine, he is the founder of the commercial real estate investment firm Avatar Equity as well as the Dhana Yoga Foundation. You can follow along with Sachin on Instagram, Facebook, TikTok and LinkedIn.