Putting Your Foreclosure Business On Autopilot To Generate Passive Income

What if there were a way to automate your foreclosure business so that it consistently generated $5,000 to $50,000 a month of real estate cash flow? And what if, instead of your having to do all the work each month to earn this money, you could build your investing business so that the business did the work? You’d get to enjoy the cash flow without the day-to-day stress.

Have we got your attention now? We’re sure we do. When done the right way, investing in real estate can create an inflation-proof cash flow that will take care of you and your family forever. Let’s get one thing abundantly clear, however.

Setting it up will take work.

Using the ideas we are about to share with you and working part-time, it may take you as long as 10 years to build your real estate cash flow to the point where you can retire and live comfortably on it. Working full-time, you may be able to do it in less than half that time.

Success Team—Peter’s Story

Over the years, I’ve built businesses that invested in foreclosures, single-family houses, apartment buildings, and large commercial real estate projects. I’ve bought everything from small, one-bedroom condos to large apartment complexes to land development deals. Remember, when I first got started, I was a 33-year-old mechanic with no formal education, no big business experience, and no knowledge of real estate. But within three and a half years, I became a millionaire. If I can do it, you can do it too.

In fact, it’s my belief that there is no better vehicle for creating and enjoying your wealth than real estate. It’s such a simple yet powerful wealth-creating force that the average person can become incredibly successful with investing. The key is to get started before you think you’re totally ready—because you’ll never feel totally ready!

THE THREE INVESTOR LEVELS—YOUR PROVEN FAST TRACK TO REAL ESTATE SUCCESS

The three investor levels—your proven fast track to real estate investment success—are described in the sections below.

Level One

Level One investing is all about belief. It’s about proving to yourself that not only does real estate work for other people, but that it works for you! How do you prove this to yourself? By doing a few deals and making a significant profit. As a Level One investor, you eventually gain the certainty that real estate will be your proven path to financial success. The key for Level One is getting yourself into action.

Level Two

Level Two investing is all about mastering the fi ve core investor skills of real estate investing (see Figure 1) and building an investment business that works without your needing to run it day to day. At fi rst, Level Two is about building your knowledge base of investing strategies, tools, and techniques. Later, it’s about building a real estate investing business. Building your knowledge base helps you leverage yourself. Building your investing business lets you leverage other people, systems, and outsourced solutions to create value in the marketplace without your being there to do the work.

Why is this so important for you? Because ultimately if you don’t learn to leverage yourself through building a strong business infrastructure of systems and people, you’ll be limited in two critical ways. First, you’ll be limited in the scale of projects and profits you can earn; you just can’t do big deals without the infrastructure in place to make the deal stand. Second, unless you build an investing business, you’ll be limited in your potential to create the time and freedom you truly want. That’s why it’s so important to learn to build an investing business.

FIGURE 1 The Five Core Skills of Successful Investors

1. Marketing—Finding great deals in any market Structuring—How to structure win-win real estate deals

2. Negotiation—How to get the other party to say yes to the deal you want

3. Analysis—How to determine if a deal is good in five minutes or less

4. Contracts—How to write up money-making real estate deals

Level Three

Level Three investing is all about transitioning into the role of a passive investor and business owner. If Level Two investors are the heart pumping their business forward,

Level Three investors are the brain directing the big picture of the business and enjoying the consistent profits from that business, without getting caught up in any of the daily activities. Imagine having built your real estate minie mpire in such a way that you earn massive income without directing the business day to day.

Level Three investors have simply learned to put their investing on autopilot so they don’t just make money, but they create passive streams of income. In the beginning, you’ll have to front-load your effort as you develop as an investor. It will take you hundreds of units of effort to succeed as a Level One investor and get your fi rst few paydays.

Later, as a Level Two investor, it will take you 10 to 20 units of effort to get your paydays. And finally, as a Level Three investor, it may only take one or two units of effort to enjoy a lifetime of paydays. The secret is to understand that it really is worth getting all the way to Level Three, but that you’ve got to pay your dues to get started.

The foreclosure business we created gave us the cash flow to venture into more aggressive Level Three investing. Without the cash flow that our foreclosure business provided, we would not have had the flexibility to look at more complex real estate investments. To this day, our foreclosure business is alive and thriving.

We have turned that into a Level Three activity. We now have buyers we have trained to do the transactions, and we share in the profits. It keeps cash coming in and allows us to stay in our highest and best-use activities, which are now all in Level Three.

Key Characteristics of a Level Three

Foreclosure Business

Following is a list of the key characteristics of a foreclosure business operated at Level Three: It’s healthy and growing yet takes fewer than 10 hours a month of your time.

All day-to-day buying and selling decisions are based on proven formulas that are immune to individual opinions and mistakes.

It has the capacity to take on more business without decreasing net profits. It’s flexible enough to make money in any real estate market. It has comprehensive business systems documented in manuals, not merely in the heads of your team. It creates cash flow, long-term wealth, and a fun, balanced lifestyle for your team and for you, the owner.

Once you’ve taken action as a Level One investor, the next hurdle you’ll face is succeeding as a Level Two investor who needs to refine his or her investing skills, then build an investing business.

Let’s break this down into finer detail so you can use these insights to do what the average investor never does. You can free yourself from the day-to-day need to run your foreclosure business and reach Level Three success.

Three Stages of Level Two Investing

Level Two investing is broken down into three distinct stages. Each of these stages has a different developmental focus for you, the investor. Here’s a quick snapshot of each of these stages.

Early Stage Level Two. If you are in this stage, you’re learning to master the five core skills of successful investors: finding deals, structuring deals, negotiating deals, analyzing deals, and contracts and paperwork.

It usually takes Early Stage Level Two investors 12 months to learn the core skills and gain the confidence and composure to use those skills effectively. Once they’ve built this foundation of skills, they move on to Middle Stage Level Two investing. Middle Stage Level Two. If you’re in this stage, you are refining your investor skills and learning to leverage yourself so you can produce more for your investing business. At this point in your investing, you are the central hub around which your business revolves. You’re like a doctor whose whole office is organized as efficiently as possible.

As a Middle Stage Level Two investor, you leverage your time every way you can by building the team and systems around you to keep producing for your business. You’ve become fluent in all five of the core investor skills. You can take a deal and work it smoothly from start to finish, troubleshooting it along the way as needed. With this competence comes the confidence to jump on good deals fast.

Yes, you’re still working to fine-tune your five core investor skills, but at this point, it’s much more about making small refinements than developing these skills from scratch. As you transition through Middle Stage Level Two investing, you increase the number of ways you leverage yourself by building systems and growing your investing team. You tentatively let go of pieces of your business and free up your time to focus on those parts that earn you the greatest return for the time and energy invested. You hire a full-time or part-time assistant, outsource your bookkeeping, and perhaps even contract with someone to show your properties (ideally on a commission basis where you only pay for results).

At this point, you either make the crucial shift to leverage yourself by growing your investing business, or you get caught in the daily grind of being the sole producer for your investing business. Many Middle Stage Level Two investors get trapped because they never learn to separate their business from themselves. Refining your skills and leveraging your time can make you an extremely successful Middle Stage Level Two investor, but ultimately to break out of the small-time bubble, you need to build an investing business that has a life beyond your being the hub of it.

As you know, you’ll ultimately reach a limit to what you’re able to produce through your own efforts. This is why it’s important to progress to Advanced Stage Level Two investing. Advanced Stage Level Two. You’re building the systems, teams, and outsourced solutions your business needs to generate profits consistently and independently of you and your efforts.

As a Middle Stage Level Two investor, you were the central hub around which you built the pieces of a viable business. Chances are, you were the one driving it, negotiating the deals, and directing who does what The biggest difference between a Middle Stage Level Two and an Advanced Stage Level Two investor is that in the Middle Stage, you’re building the business to complement your skills and leverage your investing efforts. But because you remain at the hub, if you aren’t actively involved, your Middle Stage Level Two business will grind to a halt….