The Simple Roadmap to Consistent Monthly Income from Real Estate

The Simple Roadmap to Consistent Monthly Income from Real Estate

At Luminate Home Loans, we are passionate about helping you purchase a home not only because we know how much excitement and joy the process brings, but because we know how important owning real estate is when it comes to creating a bright financial future and building a secure retirement. We’ve done it ourselves, and we’ve seen it pay dividends time and time again for the clients we serve.


Owning rental properties is a very well-known and attractive option for creating passive income and monthly cash flow. This is especially true in an environment like today and likely in the future where inflation is high, social security is unstable, and retirement savings are not going to be enough to live off of.


The reality is, saving money the traditional way is not going to help you reach your financial goals. You need your money to make money for you. Unfortunately, a lot of people don’t take the first step to investing and building wealth because it’s not immediate gratification. We are all really good at thinking and planning weeks, months, and even years in advance, but we are terrible at looking ahead decades – and it’s this foresight that is so crucial when it comes to creating a stable financial future for yourself and you family.


We firmly believe that owning multiple cash-flowing properties is one of the best, most reliable, and fastest ways to build wealth today. And for those who have a long-term mindset, it is 100% possible today. Let’s find out how.

How to Start Your Rental Property Portfolio

The image below shows a real estate investment roadmap from our friend Casey Franchini at Brick By Brick Wealth, and it illustrates how quickly you can accelerate your earning potential with real estate and get your money working for YOU.


Casey has dedicated her career to helping every day people create passive income and generational wealth through rental property investments, and firmly believes that you do not have to BE rich to GET rich. You can start from nothing and create a steady stream of income upon assets that are appreciating in value.


For the purposes of this example (the numbers can be changed to fit any scenario), we’ll assume you are able to save $1,000 every month from your current sources of income, with the goal to save $20,000 to use as a down payment on your first property. This means if you started today, it would take you 20 months to save enough to buy your first investment property.


Let’s say you are able to rent out the property and realize a monthly cash flow of $500 after the mortgage and expenses are paid. Now you are able to save $1,500 every month, which means it would only take you 14 months to save the $20,000 needed to buy the next property.

Assuming rent and expenses are equal, you are now getting a cash flow of $1,000 every month to add to your $1,000 savings. That $2,000 you put aside means you can buy your next property in only 10 months.


And on and on this goes with the amount of time you need to save up for each down payment decreasing as your rental income increases. After a few years, you would have 10 properties giving you $4,500 in monthly income, and you would be in a position to purchase a new property every three months.


3 Tips for Building Your Rental Portfolio

Start Small:

Once you’ve set your objectives for your investment goals, the next step is to buy your first property. There are plenty of things that could go wrong with your first purchase, so we recommend that you start small with your first few purchases.


Smaller single-family homes require less work compared to multifamily properties and are generally easier to acquire.


Also, don’t buy the grandest single-family property available on the market. Your aim should be to learn as much as you can from this transaction and get a sense of what it’s like to be a rental property owner. Most property investors even start out by renting out their old residence which is generally safer than buying a house for investment.

Do you Research:

Single-family homes in a neighborhood you know are usually the best option to start with. Before you think about investing in popular big cities or major tourist destinations, invest in your own neighborhood first. This allows you to evaluate the property and better understand the local challenges within the area. You also most likely already have access to vendors and service providers you trust. If problems were to arise, it’s easier to handle them yourself if you live within the area.


Grow Exponentially:

One of the reasons why real estate is preached by successful people is its ability to be used as leverage to grow rental portfolios exponentially, which is why you should take advantage of this fact and acquire more income-producing properties as your portfolio gets bigger.


For example, if you bought a single-family home for $200,000 which you rehabilitated and rented out for a year, you could refinance that property and use the cash to acquire bigger properties (or more properties) rather than buying one property of the same kind and price range. Then, repeat the process and buy even bigger properties (maybe an apartment building with more units).



The idea is to grow your portfolio exponentially by buying more or bigger properties rather than adding one property to your portfolio each time. Put your money to work for YOU while you reap the rewards.


The Bottom Line

We firmly believe that owning multiple cash-flowing rental properties is one of the best, most reliable, and fastest ways to build wealth today, because it’s a strategy that provides both short-term gains and long-term wealth through appreciation.


It’s a tried-and-true strategy to quickly reach your financial goals, but the current market has a lot of people afraid of making the decision to purchase even one property, let alone MULTIPLE properties.


It’s important to remember that the secret to success is when other people are fearful, THAT is the time when you should be making moves. Because when it comes to real estate, the biggest investment is not actually your money – it’s TIME.


Real estate is not a get rich quick scheme – it’s a get rich FOR SURE scheme. Anybody can do it. It just starts with discipline, a well though-out plan, and TIME. The sooner you start, the better off you’ll be.

Overcoming Housing Market Fears

By Luminate Marketing Team • 06 May, 2024
The recent headlines broadcasting mortgage rates surpassing the 7% mark have instilled a sense of apprehension among potential homebuyers. In a market perceived as increasingly unaffordable, it's easy to feel discouraged. However, with the right mortgage strategy, you can transform this challenging market into an opportunity.  Historical Perspective on Mortgage Rates While current rates hovering around 7% seem daunting, a historical review reveals a broader context. During the early 1980s, mortgage rates soared to 18% and even in more stable times, rates have frequently fluctuated above 10%. This historical perspective is vital because it demonstrates that while today’s rates are higher than in recent years, they remain within a historical long-term normal rate range.

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By Luminate Marketing Team • 28 Apr, 2024
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Understanding Economic Shifts: How Rising Fast Food Prices Intersect with the Housing Market

By Luminate Marketing Team • 21 Apr, 2024
Have you been noticing the prices of fast food and other products going up? Well, you're not alone. Across the country, families are feeling the financial pain of previously low-priced items suddenly costing double (or triple!) what they’re used to. For example, a lunch for two in California at a fast food chain can easily be $40 nowadays, which is a big jump for places that tout “cheap fast food.” But why exactly is this happening, and what does it have to do with you buying a home? Keep reading for more insights. Why Are Prices Going Up? Starting in April of 2024, the minimum wage for fast-food and healthcare facility employees in California was increased. As a result, their wages went from $16/hour to $20/hour in order to provide better wages and living conditions for these workers. This rise in minimum wage, while much needed for the economy, is happening all across the nation. And when businesses have to pay their employees more, they often raise their prices to cover the costs. Which, unfortunately, means the burger and fries you love might cost more now. What Does This Have to Do with Housing? In recent news, you may have heard of President Biden’s housing plan to help first-time homebuyers and to reduce housing costs. This plan would give money to first-time homebuyers and some families looking to sell their homes. But just like with the fast-food industry, the effects can vary. In some places like California, where not enough houses are available, making homes more affordable might not be enough. In other places, it might help a bit more. So, What's the Best Move for Homebuyers? If you're thinking about buying a home in the near future, it's good to know about these changes and plans. By staying informed and working with an expert lender, you can take advantage of any changes as soon as they happen. But even though extra money in the economy sounds great, it's important to look at the whole picture, like how many houses are available and how much they cost. If more homes become available and the costs of borrowing money for a home go down, this could be a better outcome for buyers vs money that is thrown into the economy. Conclusion Understanding these changes can help you make better, informed choices about your financial future. Whether you're saving up for a big purchase or just deciding where to grab lunch, let us help you save money where it counts! Reach out to us today so we can help you navigate your home-buying journey without having to skip out on the fries.
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