Is Real Estate Investing the Side Hustle for You?
Real estate investing (REI) is the oldest and still the best income opportunity
Ninety percent of all millionaires became so through real estate. Andrew Carnegie said it 150 years ago, and it still holds true. Houses matter deeply. The place we call home, the place we build a family—No wonder real estate investing (REI) is the oldest and one of the most prolific ways to make money. It’s an entrepreneur’s biggest opportunity for income. But how much commitment does it take?
The vast majority of real estate investors are far from full-time. According to the IRS, approximately 10.6 million people in U.S. earn income from about 17.7 million rental properties. Over half of Backflip’s active members have a day job, doing flips and rentals as a side business—some buying three to four properties a year. Their goal is first to quit the day job, and then to let their investments do the work. At Backflip, we even have a name for this investor set: PDPs, for Pursuing a Different Path.
REI offers bigger risks, and bigger rewards
Is REI a truly passive income source? Not for most Backflippers. Getting started can take a bit of work, and there will be surprises along the way. For instance, the first time you underprice and overspend on material costs because you didn’t consider the price of lumber going up. It is not as easy as driving an Uber, or as low risk as writing a Substack.
And it’s not necessarily the lowest cost commitment. To get going in REI, our data suggests it’s good to have at least $40-50K to start with. If you’re looking for lower cost and lower effort ways in, consider partnering with a team to buy a fraction of a property, acting as a private lender for other investors seeking earnest money, or buying shares in a REIT for as little as $100. These are all great way to test the water.
But along with the bigger risks of more hands-on work, come the bigger rewards:
- The average estimated profit Backflip members generate per flip is $70,686.
- Over just the last three months, Backflip has seen over 15,000 separate properties analyzed by its users, adding up to approximately $2.6B in estimated profit potential on Backflip alone—still a small portion of the big REI pie.
Are You A PDP?
In short, REI’s not for everyone, but it is for anyone. With a bit of effort, REI is a doorway to passive income and financial freedom for people of all ages and backgrounds. Come to a Backflip event, or join the community to discover if REI is the fit for you. If it is, you’re in for an incredible ride!
This article is for informational purposes only and is not legal, financial or investment advice. To obtain advice tailored to your particular circumstances, you should consult a licensed professional advisor.