"I just closed on a new house!!” Lunch dates every few months with my group of college friends always seem to start with life-altering news like this. Today it was me making the announcement. Answering everyone's questions regarding the details, I stated it was a great deal and that I had worked with a realtor since our last outing to find the right place. It needs some work but contractors are already scheduled to start. After some congratulatory exchange, the conversation dwindled to how soon I expect to move. Realizing this would cause a discussion, I announced the house is an investment property, specifically a rental home.
Why Not Flip it?
Another friend asked why I just wasn't looking to resell it after the repairs are completed. Pressing further, she questioned that if it was a good deal and there are qualified people doing the needed upgrades, why not just flip it? There would be a nice lump sum of money, much like winning the lottery. I agreed that many people choose that option but my real intention was to have passive income.
Judging by the confused looks on the faces around at me, I knew I needed to explain what I had just said. I didn't want to overcomplicate or oversimplify; so, I opened Wikipedia and read aloud the definition, “a term used to describe income earned on a consistent basis with little effort to maintain it.”
After seconds, that seemed more like an eternity, one friend asked how I stumbled upon this plan to increase my income. My answer: Monopoly. Using the same principles as the game, purchase property, collect the rent, while still earning my current salary, I could duplicate the outcome in real life. Shortly thereafter, I attended some seminars, read some books and found a mentor willing to help. I offered to pass along all the details of what I had learned. Upon parting ways, one friend said she did not anticipate lunch with old friends would spark a such discussion on income tactics.