Do you want to build wealth? Surely everyone does. But knowing how to start building wealth through real estate can be tricky. It’s important to gain experience and learn from both your successes and losses — or learn from other people in the game.
In the seventh episode of the Passive Investing Show, J and Ashley are joined by Daniel del Real and Aaron West to discuss what you should consider in making investments so that you can build wealth.
Here are some power takeaways from today’s conversation:
Episode Highlights:
[06:16] How to Create Passive Income
Separating themselves from their budget helped Daniel del Real and Aaron West build wealth. Find out what you can live without and what you can invest in for future returns. Invest in people, not in businesses. Make sure to find people who can pivot and adapt quickly when the market shifts.
[12:02] Lessons From Small Balls and Losses
Learn from playing the small ball. Long-term relationships are forged through returns on mental capacity and relationship capital, not investment. Listen to the full episode to learn the criteria Daniel and Aaron look at when investing and how they create long-term relationships!
[21:22] Criteria for Investments
Sometimes a startup idea can be great, but it isn’t the right time, or the wrong person is taking it to the finish line. Determine if you want the property. Make sure the operator has communicative knowledge. Look at their past performance, plan for the long term, and cash.
[28:55] Diversification in Your Passive Portfolio
At some point, your wealth will become more money than your bandwidth can handle. That would be the right time to diversify your portfolio.
Think about how you can be insulated so you can do well even if the market shifts. Diffuse the risk by investing in different assets. Understand that while investing takes mental capacity, you’re learning your capacity and earning your 4Cs to level up assets in the future.
[36:37] Investing Moving Forward
Due to the housing shortage, residential real estate will be as strong as ever. The fundamental housing issue might lead to homeownership becoming a novelty. If you want to buy a house, you should have an infinite mindset.
[39:36] Aaron and Daniel’s Investing Advice
Understand your fundamental principles and objectives. Stick to your principles and values because they are what will lead you to true freedom. Focus on making a base hit, then finding a new deal.
Notable Quotes from the Episode:
[14:14] “You have to learn the unsexy first and the lessons that you learn playing the small ball and then in 5, 10 years, you’ll have an opportunity to level up.”
[21:46] “A lot of startup ideas are awesome. It’s either not the right time or it’s the wrong person that’s taking it to the finish line.”
[34:12] “If you keep outsourcing as an LP, that ‘C’ of courage, because you’ve never taken down a property yourself, you never find out what your capability is and never find out what your capacity is.”
Resources Mentioned:
