A lot of people talk about financial freedom and how to find it. Most of us have found it to be largely illusory, meaning we cannot seem to achieve it for ourselves. A lot of people believe that it’s not real or possible. However, I think you can achieve financial freedom through real estate. We’ll talk about how.
Defining Financial Freedom
Financial freedom means that you can cover your expenses with the cash flow you earn off rental properties. If your expenses are $6,000, you’re going to need at least $6,000 of cash flow to pay those expenses and not have to do anything else. That means you don’t have to work anymore if you don’t want to. You set the pace and you’re free, financially. If you want to buy more properties, you can do that. Or, you can sit back and enjoy a life of relative ease.
Calculating Cash Flow and Expenses
For me, I want to be focused on real estate. I like buying and selling real estate and running a property management company. So, I have to know how many properties I need to avoid doing anything else.
My monthly expenses are $6,000, and I need to calculate my average cash flow per property. For me, it’s about 30 percent per property. So if the rent is $1,000, I get a $300 cash flow. How many properties at this rate do I need to pay my monthly expenses of $6,000? Take the monthly expenses and divide by the 30 percent – $20,000. That’s the amount of gross rents that I need to collect to be financially free. So if the typical property is $1,000 a month in rent, I will need 20 properties to get financial freedom. If you have a partner, double it to 40 properties. That might sound like a lot of properties, but it’s not. Once you get one or two under your belt, the process gets faster. Lenders like working with you and you’ll be able to get deals done faster and faster.
Set Your Goals
That’s all you need to do. Set your goal for the 20 properties and go for it. If you get 10 properties, which is half, and you pay off those mortgages, you don’t need as many properties because you have less debt. So if this is a long term strategy, or a 
retirement plan, you want to keep buying. You also want to continue paying off mortgages so it gets easier. You’ll find you’re better off financially each day.
If you want to succeed this way, please contact us at Bradstreet Proper, and we would be happy to help you.