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The levels of Investing
Cash flow and net worth combined will over time give you success. Cash flow is the money you get each month that you can use to fund your lifestyle, to invest in more assets and you can use to share for the greater good. Net worth give you long term financial health. Its equity you can use to convert into lump sums of money. Its capital you can convert into cash flow. Real estate investors need to grow through the following levels.
Level One - level one investors have proven that real estate works for them. They have done it by making a significant profit on their first few deals. They are certain that real estate investing will be their path to success. They know they have a lot to learn, but they've seen that it can be done.
Level Two - level twos are all about mastering the 5 core skills of real estate investing and building their business to support a real estate portfolio. They have a net cash flow of 5-50 thousand a month and an increase in their net worth 250k or more per year. Most investors stop at this level, they don't know there is more.
Level Three - this level makes as much money as level two except they do it passively. They work less than 10 hours a month. Their property portfolio and business work without them needing to be there all the time.
In order to move through the levels the level one should get out of the thinking mode and get into the doing mode. Go out and meet with at least 3 sellers a week. Stop and learn from your experiences on a regular basis. Do, learn, and regroup is the key to your initial success.
The 5 core skill of a level two are consistently find motivated sellers, being a master negotiator, quickly analyze deals, and knows how to structure a variety of deals and knows how to write up deals and understand the contract part of investing.
Level three needs the belief system. You need to have the belief that supports you seeing the opportunities that exist in big deals.
Where do you fit in?
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