Crazy Challenge?

[Sborg]

A friend of mine, who I am in the real estate business with, challenged me during my morning run the other day. In the next 30 days, I am to identify a way to make $100/month of passive income. Don't worry, I am not here to sell anything, and I am not here to be spammed.

So, I have been racking my brain. One interesting thought I had was that you can cut out certain expenses, or consolidate expenses, thus adding passive income by default.

But it is also fun to generate income as well.

Post your brainstorm ideas...we can all benefit from the community on this one!!

 

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[MJ DeMarco]

Call Geico and save 15% on your car insurance? Just kidding, great topic.

 

[Runum]

I think your friend may have wanted you to focus on the income side of it rather than the cutting expenses of it. You could make a how to video about something you know and market it on the net.

 

[Sparlin]

It's funny you bring this up. I am actually putting together a plan for this type of thing right now. My goal is $300 monthly. Perhaps a lofty goal for someone with my experience level, but I think it's feasible. I was thinking of starting a similar thread/ progress report with MJ's permission. Still need a week or two to get the plan finalized.

 

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[klee]

You'll already in the real estate business so taking the step to creating passive income from property should a fun one for you to achieve. Construct a deal so it's no money down and generating positive cashflow... and you've got yourself a winner!

Other ideas maybe create an ebook(s), create a site where members subscribe for monthly memberships (ie. forums, dating sites), utility warehouse (not sure if you guys in the US have this), coin / vending machine business (food, drinks, sunbeds, one recent idea I found was a coin operated hair straigthener which were located in female tiolets in nightclubs, fitness gyms), I'm sure there are many more ideas which other members can suggest!

 

[fanocks2003]

A friend of mine, who I am in the real estate business with, challenged me during my morning run the other day. In the next 30 days, I am to identify a way to make $100/month of passive income. Don't worry, I am not here to sell anything, and I am not here to be spammed.

So, I have been racking my brain. One interesting thought I had was that you can cut out certain expenses, or consolidate expenses, thus adding passive income by default.

But it is also fun to generate income as well.

Post your brainstorm ideas...we can all benefit from the community on this one!!

If you have money: Lend money and get interest.
If you have no money at all: Find a deal and get a cut of monthly cashflow.

 

[MJ DeMarco]

It's funny you bring this up. I am actually putting together a plan for this type of thing right now. My goal is $300 monthly. Perhaps a lofty goal for someone with my experience level, but I think it's feasible. I was thinking of starting a similar thread/ progress report with MJ's permission. Still need a week or two to get the plan finalized.

No permission needed for any progress threads!

Construct a deal so it's no money down and generating positive cashflow...

While maybe 3 years ago, I don't see how this can be done in this market environment. Can you tell us how you construct a "no money down" deal in this credit environment? Other than 50% owner carry backs, I'm not sure how one does this in this type of market.

 

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[YoungOne]

If you are only looking to generate a small amount of passive income, $100-300 a month, then you could look into an Affiliate program. Use your blog as a starting point, then maybe create a site that is dedicated for affiliates.

Is it crazy? No.

Would changing the number from $100 to $1000 or $5000 be crazy? Yeah a bit more crazy. Crazy would be doing something more extreme than others while working with less resources than others in a shorter amount of time.

 

[klee]

No permission needed for any progress threads!



While maybe 3 years ago, I don't see how this can be done in this market environment. Can you tell us how you construct a "no money down" deal in this credit environment? Other than 50% owner carry backs, I'm not sure how one does this in this type of market.

I’m guessing finance is different in the US than in the UK. There are several ways to achieve NMD in the UK, difficult as lenders don’t like it but not impossible to do.

For example purchase price £70k, market value £100k. Some examples to achieve NMD are explained below.

- Bridge and same day refinance: Arrange a 100% bridge (£70k) for 1 day and refinance on the same day for 75% LTV of its market value, giving you £75k. £75k pays off £70k bridge, you are left with £5k to cover cost. This use to be the easy way to do it until the main lender that allows this went bust, there’s still one other lender that allows this but is on case by case basis.

- Bridge and refinance: Arrange a 100% bridge (£70k) for several months and refinance for 75% LTV of its market value, giving you £75k. £75k pays off £70k bridge, you are left with £5k to cover cost.

- Back to back: 2 buyers involved. Buyer 1 purchases from seller at £70k, on the same day end buyer buys it for it’s true market value of £100k from the middleman. Banks lend end buyer 75% of it’s market value giving £75k, middle buyer provides a secured loan to end buyer for £25k in a separate transaction. The end buyer now has £100k to purchase from the middle man. End buyer passes £100k to middleman, middleman passes £70k to seller and middleman is left with £30k. He keeps £25k for the loan, passes £5k back to end buyer which will cover cost.

- Further advance: banks will loan of its purchase price, 75% of £70k gives £52.5k, you put in £17.5k deposit to complete sale of £70k. Next day apply for further advance (unsecured loan) from the same lender, they will loan up to 75% of it’s market value which means they can loan you up to £75k. Lender provide you with a further advance of £22.5k giving you the deposit back and some cash back.

- Options agreements: almost structured the same as a back to back but the paperwork is different.

- Mandate / irrevocable agreements – Purchase for it’s full market value of £100k, lender provides £75k, a finance house loans you the £25k. £100k passes to the vendor, you have a private contract in place stating that any funds over the £70k will be held by their solicitor and past back over to the finance house, vendor receives £70k, £25k is past back over to the finance house, £5k covers your fees. There are other schemes based on this process but the paperwork is different.

- Lease options and rent to buy / subject to

- There are several more methods but they escape me at the moment!

 

[biophase]

Check out the The $100 Challenge.

$100/month passive should be fairly easy with 20 hours of work.

And I also agree with the others, saving $100/mo is not the same as making $100/mo. In fact they are extreme opposites on this forum.

 

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[rcardin]

1 "subject to" deal. Hold it and count on the apreciation (depending on your area)

otherwise you want to pick up a subject to with 70% true LTV and it should generate at least 100.00 a month just in increase of rent vs. payment P.I.T.I.. Find the right deal and anyhting is possible

 

[kidgas]

First of all, I would like to say that I think the term "passive income" is a misnomer. If you already have the cash to invest, you could go with CDs, bonds, dividend stocks, real estate, etc. You would still have to take some time to research and manage those investments (or pay someone to do it for you). Plus that money would have had to come from somewhere, and in most cases, from your hard work on another venture or job.

If you don't have the funds initially, then you are going to have to spend some amount of time to set up your "passive income" stream. I would prefer to think of it as residual income. I also am starting to think about create systems and value. Is there anything that I enjoy doing that I can somehow do somewhat differently in order to create value out of that activity (or monetize it). Is there a way to leverage my time or talent or knowledge?

I had a friend in high school who was able to monetize his sleeping time which is pretty close to "passive income". He had a job at a funeral home sleeping in the backroom. His task was to unlock the door for any transports from the morgue. He made $4/hour compared to the $3.35 minimum wage at the time. Most nights he just slept.

I like the $100 challenge info. That is certainly a start on some residual income but would take some work to get started and some time for maintenance. Do you like to golf? Walk the course during slow times, look for lost balls, clean them up and sell on eBay. You take something that you would ordinarily do and add some value to that activity. There are all sorts of possibilities when you start adding the power of the internet for dissiminating information.

You also need to look into systems creation. I am also most of the way into the E-myth by Michael Gerber. It is a good book that is talking about this topic. I would recommend it highly.

 

[rocksolid]

How about starting a service. I made a few bucks converting peoples old VHS home movies into DVD. You could start a dog walking biz, or a dog poop cleaning up service. Car washing, weed removal just to name a few.

 

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[Sborg]

LOL, but actually, this is one I definitely thought about. My wife did more than think about it: She called and got a new quote, and we are saving close to $50 a month!

 

[Sborg]

I want to thank every single person in this forum who replied to my thread. I truly appreciate it. One book I would highly recommend to us is How to Get All You Need Out of Everything You've Got, by Jay Abraham. I've been scouring the internet for passive income ideas (not just the I've got to sell you this system type of sales letters, but actual blogs with ideas that they are sharing versus selling).

I am planning on the E-book, and I do affiliate marketing already. Google Adsense and E-how articles are trickles that I am building for the long term. But I am looking for something that I can generate more quickly. Thanks so much for all the thoughts.

Steve