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Real Estate Investing Diversification

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Don’t put all of your eggs in one basket.

Financial experts and financial planners will usually recommend some sort of diversification in your investment portfolio. As part of your financial freedom planning with real estate, I recommend diversification as well.

Your real estate investment portfolio could contain some low risk and high risk investments; some low return and higher return investment; some active and passive investments; and some short term and long term investments. Of course how you chose your mix will depend on where you are financially (do you have any cash to invest)? How active do you want to be? How soon do you want to quit your 9 -5 job, and become a real estate investor full time or part time?

For example, let’s say you are working full time and you don’t have a lot of cash saved up. You want to quit your job in 1 year and then live on passive income in 2 more years. You will need to do some part time assignments and referrals to generate some short term cash to allow you to quit your job. Once you quit your job you would work as a full time real estate investor. You could continue doing referrals and assignments to generate more short term cash. You would also add some JV Lease Options that would generate short term cash, monthly income and a large payout in 2 to 3 years. You would invest any money above your living expenses back into passive investments, such as Passive Lease Options, Passive Buy Rent and Hold, Mortgages or Notes. Once you have accumulated enough passive investments, you can transition from active to passive real estate investing.

Sounds easy right? Actually it is when you have the right training and support.

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