Let me start this post off by sharing with you; that I created a multimillion-dollar real estate business in my twenties and lost it all before I was 30. I also invested over $40,000 to be mentored by so-called gurus who ironically all went bankrupt after me. That’s Irony at its best!

After I had lost everything I had to figure out what I was going to do. In real estate, we did a few things. We owned rental properties as well apartment buildings and flipped houses.  Flipping houses was my favorite. I love walking into a space and creating a brand-new vision for it.

My reality was, I not only lost all my money but also investors’ money ( that was from investing in apartment buildings) and the cherry on top was I learnt that the teachers who taught me to over leverage myself in order to scale quickly was the worst possible thing I could have ever done.

I found myself back at ground zero and I am not going to lie I had a few deep wounds from it.

I spent many hours reflecting on how it all happened.

I learnt many lesson’s and for that I am truly grateful. I realized in real-estate you need money, either your own or investors and I did not want to go get any investor money…

… and that left me to wonder what the heck am I going to do?

I knew to become free I needed to take control over my destiny but I just lost everything I worked so hard for.

So I asked myself:

“How could I start something with a minimum investment that could make me as much money as I was making from Real Estate.”

Little did I know I was about to find the pot of gold at the end of the rainbow!

I wish someone would have shared with me what I am about to share with you because it can be the quickest and least risky way to wealth you have ever seen!

I am a visual person so let’s lay this out.

Let’s say you want to buy an investment property and if you are like me you are already $40K in the red from your education.

Let’s say for this first property you are buying a fixer upper that you want to rent out so you can generate passive income. BTW it’s not so passive….

Purchase Price $150,000

Down Payment (depending where you live that can range from 10%-20%)

At 10% $15,000 at 20% $30,000

You need to either invest that down payment from your own money or get an investor

(Let me share with you the stress created by getting an investor can become a complete nightmare)

Moving on…

In most cases, you are getting a great deal on this property because it needs some major improvements. You need to either have the skills to do that or the money to hire a contractor which can also be a total nightmare.

You will need access to money, again it can be a credit card, line of credit or the lovely investor.

Psst… don’t you just HATE it when you go to real estate investing workshops and the first exercise of the first day is showing you how to increase your credit limit!!!  How crazy is that right!

If you ask any person who does real estate investing for a living, they will tell you anything you see on HGTV is a pile of crap.

They never show you the properties that don’t work out and it only takes ONE bad project to completely paralyze your business.

Let’s not forget the holding costs which are a mortgage, property tax, hydro and heating while you are renovating the property.

To get started we have invested so far

Education                            $40,000

Down Payment                   $15,000-$30,000

Repairs                                 $ 15,000- $40,000

Holding Costs                      $5,000

We are looking at $75,000 – $115,000

You might be saying you would never pay the 40K for training ok let’s take that off

That’s would be $ 35,000 – $75,000

Plus, your risk is; you may go way over budget, find something in the house that costs 2 or 3 times what you can pay for. You may not rent or sell the house as fast as you need too. You can quickly run out of money. It can be a complete STRESS BOMB!

Trust me when I say I can tell you horror stories that will have your jaw hitting the ground with things that can go wrong but we’ll save those stories for another day.

Let me show you what’s on the other side of the rainbow.

 

Internet Business

An internet business can be one of many things you can choose from. You could have an e-commerce store or drop ship from China, start a blog, you can sell services or consulting. You may choose to set up a completely digital business which offers a digital book, video courses, and coaching programs.

You may be asking but what can I sell online?

What are you good at?

Do you have a skill or talent you can share or teach people? Maybe there is something people come to you for advice about? Do you have a passion? If you look hard enough you will find something.

You can ‘sweat equity’ earn it as well.  You can take an internet business “how to” course that interests you (for example how to do webinars), do it, get good at it, get results and then use yourself as a case study and then teach it!

There’s your pot of gold!

Unlike a property, an internet business has much less stress to start up and is much more affordable!

In fact, you could have tried 3-4 failed attempts before getting a winner and it would still be less than one property and could be worth much more!

Let’s look at the numbers and this is looking at the cheap bootstrap numbers all they way to the expensive route.

Education                                                                            $500-$10,000
Software/ Setup of business                                             $150-$5,000
Facebook Ad startup                                                        $500- $2,000

Total                                                                                   $1,150-  $17,000

Let’s say the first business is a total flop.

The thing is… you never lose your education and that’s a powerful asset!

This is very important…so bear with me.

What’s cool is that you can try again and be up and running for less than $500.

Not only is an internet business much less risky to set up and more affordable but it’s the life style it allows you to have that makes all the difference in the world.

All you need is a laptop!  When I go on vacation to sunny Florida (I live in Canada) I happily check my laptop from my balcony and put in less than ten hours during the week to keep my online business humming along.

Why do people want to invest in real estate anyways? To retire of course, but the thing is you are married to your properties and it can become a ball and chain.

I have been on vacation and gotten “the dreaded phone calls”… a water heater broke or a tenant had a kitchen fire. There was a massive rainfall and the house flooded. The list can go on and on.

With an internet business, you can work from anywhere you choose. If you take the right training and are shown the correct systems, you can live like you are retired and make more money than any rental property/ properties could ever give you. I am not saying running an internet business is stress-free but it is way less stress than any real estate project I have ever done.

Plus, you can automate an internet business which is not something you can do to a real estate business. I remember my first membership program and I will never forget waking up to my email box with all the You received payment emails.  I remember thinking to myself I made more money that month then the profit I made off one of the 18-unit apartment buildings I had and that’s when it all clicked for me.

After the 1st month, I was at 100% profit each month. Can you pay off the mortgage of your investment property after 1 month and be at a profit every month after? I don’t think so. That 18-unit building I owed over 800K and had many expenses and yet this simple internet business was making more profit than the 18-unit apartment building.

It was a massive light bulb moment for me and I hope this has been one for you!

I am not saying you can't be successful in real estate as I still have some friends in real estate doing very well. My point simply is that an internet business has fewer start-up costs and not as much risk. You might be wondering how you can make money online? Check out our post 31 genius ways to make money online. 

 

real estate vs internet business

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