Its all about perspective. The way Casey attempted to “get rich” was by knowingly breaking the law. Along the way, he made a lot of bad decisions, and took on way more than he could possibly handle on his own. To do 10 properties he would probably need a team of 20 people and some very good business contacts (contractors, agents, lawyer, accountant, etc.).
There are ways to get rich in the real estate business, but it requires careful planning and good timing. It is possible, for instance, to flip a property for a profit. However, it requires the right property, lucky timing, and careful research. You have to determine your target market, renovate the house to suit their needs, and keep in mind your projected selling price, cost of renovations, and therefore how much profit to expect. To profit, this must be completed to a very strict, tight schedule. Otherwise, the monthly upkeep costs get out of control and slowly destroy your potential profits.
If done correctly, a fair amount of capital can be generated. However, its not easy… I hope to attempt my first one in the next year, but it all depends on financing, finding the right property and making sure the market is still warm enough. (Not to mention finding a partner and convincing my wife it’s a good idea).
Once you’ve earned that capital, let’s say $30,000, it is possible to then roll it over into other investments. Perhaps flip another, more expensive house, then invest in some commercial properties.
In my current situation, I’m renting 13 bedrooms already, so I have some significant passive income. Once the mortgages are paid off, I would be earning $5000/month. Thus, I am already fairly close to being able to live off of my passive income. If I had 5 or 6 properties paid off and generating the same ballpark income as my current properties, I would be able to live comfortably on passive income alone. From here, this would require an additional investment of 25% downpayment + 5% closing costs * 3 properties = roughly $120,000. Hopefully I can come up with some of this through a flip or two, and through attracting investors.
As in my previous post “The Market“, however, this all depends on the real estate market in your area. I live in a small town with more than 10% of the population being students. Furthermore, we have a vibrant downtown core where people are willing to spend more on rents. So, in my opinion, there are many opportunities for real estate investments.
Obviously I’ll need some luck and a lot of hard work, but I think it is possible to make a good living off of the real estate business without putting in full-time hours.