Building Passive Income with Real Estate As An Asset

passive income

Building Passive Income with Real Estate As An Asset

If you’ve heard me speak before, you know I teach a lot about the power of real estate. I get a lot of comments about the debt involved in real estate, and why I believe that debt is acceptable. To give you the short answer, real estate is an asset that is appreciating over time. Today, I wanted to teach you about assets and how you can leverage them to build passive income.

Using Assets to Become Financially Free

Types of Assets

When I teach about building passive income, or Second X income, I teach that there are really only 5 ways. What do I mean by passive income? This is income that you don’t need to clock into a job for. You don’t have to work for anyone else, you make money for yourself!

You can build passive income by profits or capital distributions from a business, dividends from stocks, royalties from songs and books, interest from bonds or CDs, or rent from real estate. Wealth building is fairly simple – it’s just not easy.

Leverage In Real Estate

Why do I recommend getting started in real estate? Well, I think it pays off the quickest and it can be the easiest to get into.

If you have $10,000 in the stock market, it would buy $10,000 in stock, and you would have $10,000 in stock assets. If you received a 10% return that year on those stocks, it would be $1,000.

However, because of leverage in real estate, you’re able to take that same $10,000 to actually purchase a $100,000 property. The 10% return is not on the $10,000 you put in, but it’s on the $100,000 asset that you acquired with the $10,000. So, your return is $10,000. It’s literally 100% cash-on-cash return.

Keep Learning

The best part about real estate is that there is always room for growth. You may start out by just having one investment property. Then, you may gradually move onto five. Maybe, you will build a business like me where I outsource management and maintenance so I have a large real estate portfolio, but I don’t spend as much time working on them. My good friend, Dan Dyer, uses his real estate investments to transform his community.

There are so many avenues you can go down when investing in real estate, just never stop learning!

Getting Started

I know what you must be feeling right now. “Billy, this all sounds great, but I can’t afford to get into real estate.” No, you can’t afford not to. One day, a pastor that I had known asked me about investing in real estate. He had a job all of his life, but wasn’t making enough money to cut it. So, I mentored him and now he is an incredibly successful real estate investor. You don’t have to have a lot of money, you just have to be willing to get in the game.

I am hosting a real estate workshop with Dan Dyer, Mike Davis, and more in October, and I want to invite you. This is the perfect time to get you started in real estate or leverage your business to build more passive income. Click here for more information and to register!

Do you have any questions regarding investing in real estate? Comment them below and I might just answer your question in my next blog!

Billy Epperhart
Billy Epperhart
  • Ems
    Posted at 09:14h, 23 September Reply

    This is awesome!!! Love your wisdom in being debt free and free to serve Jesus ! Thank you sir!

  • Antoine Bracy
    Posted at 09:50h, 23 September Reply

    Hi Billy,

    What about fix and flip? How much could I start with to get in the game? I have a hard money lender who will purchase 75% of the purchase price before repairs. I have experience in remodeling and could use capital in my business for the rehab. Would this be considered bad debt since it’s borrowing or leverage?

    Thank you for your time!


    • Billy Epperhart
      Billy Epperhart
      Posted at 12:06h, 23 September Reply

      Hi Antoine,

      That is a great question! If you have a lender who will purchase 75% before the repairs then you’re in pretty good shape. Usually, I ask for 80% loan-to-value, but as long as you are able to keep your costs low it’s a good start. Keep in mind that the majority of fix and flips go way over budget. Expect that but also look for ways to keep your project under or just at your budget. I don’t consider real estate bad debt because it is leveraged, as you mentioned. This asset appreciates, whereas “bad debt” (or consumer debt) depreciates and loses it’s value as soon as you walk out of the store. Thank you again for reading!

      Billy Epperhart

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