So, I'm back from my Honeymoon! Yay! But, there are still two more guests posts lined up that I would like to share with you before I write my February Income Report. I'm in the middle of moving into a new apartment, so by the time I finish, I will have time to come back full strength to The Smart Passive Income Blog.
This is a guest post from Michael, who is president of Prosperity Real Estate Investments, a real estate investment company that mainly does business in Canada, but his information can be used throughout the entire world. Feel free to visit his website at www.prosperityinvestments.ca, or signup for his newsletter if you're interested in real estate investing.
I’ve been a subscriber to Pat’s Blog for only a few months and my interest to his blog is looking at other sources/opportunities of creating passive income probably not much different then many of you. I am not an online marketing guru but I’m absolutely interested in learning how I can integrate some of Pat’s suggestions into my Real Estate Investment business.
When Pat offered the opportunity to write on his blog,I thought I’d share some of my experiences of creating passive income hoping that it may benefit you in your business or venture.
My Experience to Passive Income
I started my passive income journey about four years ago not much different than the way many people start ….by investing in Real Estate. I had tenants renting out a town home I purchased in Edmonton, Alberta and every month was generating a small revenue stream or positive cash flow. This was my first eye opening experience to passive income and when the light bulb came on, I was hungry to look for other opportunities.
Four years later, I now own over 27 properties and have started a Real Estate Investment Company called PROSPERITY REAL ESTATE INVESTMENTS where our company’s focus is to help people invest in cash flowing Residential and Commercial Real Estate. We only purchase properties that are incurring a positive cash flow (Rent – All Expenses = Positive Cash Flow) and thanks to our tenants they also pay down the mortgage all the while the property is showing equity appreciation.
The passive income that I make with Real Estate has been able to let me quit my 9–5 job and let me focus on my Real Estate Investing business full time. Now when I say full time, I mean I work my own hours and what I really do full time is look for additional opportunities that produce additional passive income.
My goal this year is to look at ways of making an additional $5,000 a month in my real estate business either by Real Estate Investing, looking for advertisers for my website, Ad sense and creating exclusivity income with my existing business relationships.
You probably went back and re-read that last sentence and yes I said creating a passive income with your existing business relationships.
Passive Income through Relationships
Not many people are aware of these types of relationships as they aren’t usually public knowledge but they exist in almost every business industry and by looking a little outside of the box you may be able to create this type of passive income with your existing relationships.
As I'm investing in cash flowing Real Estate I also earn income from my Real Estate Agents, Property Managers, Property Inspectors, and believe it or not even the banks. So how?
They pay me for EXCLUSIVITY.
I have several relationships when investing in Real Estate and usually use the same people for most of my property purchases so when I approached them about possibly working out an exclusivity arrangement they were very open to offering an incentive every time we used their service.
Making It A Win/Win Relationship
The way this works is I would commit that I would only use their service when I purchase a property and they would give me a rebate or an incentive for exclusivity.
Here’s an example: I would speak with my Real Estate Agent and tell him/her that I was looking at buying 3 investment properties for my clients this year and would they be willing to offer an incentive if I bought all the properties through them. It’s amazing how positive and quickly the response was when I approached them with this.
This approach ensures they get repeat business from me and in turn I make money for purchasing investment properties which also provides me positive cash flow. Really it’s a WIN/WIN relationship and in addition, I’m creating additional income streams for each property I purchase/sell.
To give you an idea of the type of money I’m talking about our company buys roughly 2 properties every single month and our exclusivity relationship incentives create an income of roughly $3,000 per month.
Not bad of an additional revenue stream just by asking.
My intention here is not to gloat but to possibly open your eyes to this opportunity and think about your existing business relationships that may be able to provide you additional income. At the end of the day, the goal is to create passive income with several income streams with very little or no additional work.
I saw this as an opportunity as I learned this strategy from a company that I worked for in the past and wanted to see if this could be integrated with my Real Estate business. Bringing this discussion up with your existing business relationships can make you nervous but if presented well you’ll be surprised with the reaction that you get as most people do see the benefit to exclusivity relationships especially during an economic downturn.
Our exclusivity agreements that we have committed to have truly been Win, Win and this is something we continue to offer to most of our business relationships which at the end benefits everyone.
Putting these types of agreements should always be put in writing to ensure everyone understands the expectations from all parties. So draft an agreement up even if it’s a simple one page document which clearly outlines the details of your agreement to avoid possible confusion or conflict.
Keeping Your Eyes Open for Opportunities
There are so many opportunities that can provide you with additional income that sometimes we forget to stop and take step back and look at the opportunities that may be in front of our faces. This really is the intention of my message today. Re-examine your passive income model and consider are there opportunities that I am missing. You may be surprised.
I’d like to thank Pat for the opportunity to write and share one of the ways I’ve been able to create passive income and I hope that this strategy can help benefit you in your business.
Here’s wishing you all a successful journey in your business ventures.
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Prosperity Real Estate Investments Ltd.