Jaspreet Singh: How To Make Your First Million in Real Estate

Jaspreet Singh headshot

Jaspreet Singh is a financial pro and YouTube celebrity with 1.8 million subscribers for his show, Minority Mindset, in which he shares advice on how to get rich by earning passive income. Yet he wasn’t always a savvy investor.

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Although he started several businesses in his earlier years, he started wealth by investing in real estate. In a recent Minority Mindset video, Singh recalled that “I read ‘Rich Dad Poor Dad’ by Robert Kiyosaki. I realized I could go out and buy a property, rent it out and somebody else could use it, live in my property and then they pay me rent. Sign me up for that!”

Acknowledging that he began real estate investing at the bottom of the 2008 stock market crash — which gave him an advantage — he shared some of his best tips for building a $1 million+ real estate empire.

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1. Understand the Numbers

Singh said he looks for investment properties that offer a 7% return. “Meaning [that] for every $1 I invest, I want 7 cents in cash flow profit hitting my bank account in a year,” he said.

If you pay cash for a $100,000 home, for instance, you’ll net $7,000 annually. “It is pretty much impossible for 99% of people to get rich investing in real estate,” he pointed out.

But that doesn’t mean you shouldn’t do it. “Real estate investing is something you do when you have money, that way you can actually start getting the tax breaks, and actually save your money into a hard asset,” he said.

2. Take Advantage of Tax Breaks

Investing in real estate offers numerous takes breaks through deductions, depreciation and something called the 1031 Exchange, wherein you can sell one investment property and purchase a similar property within 180 days. Further, you won’t have to pay capital gains tax on the sale.

Plus, real estate tends to rise in value over time, unlike money in the bank which loses value due to inflation. Holding your money in a hard asset, such as real estate, can help beat inflation.

3. Use Active Income to Build Passive Income

If you’re only making $7,000 per year on a $100,000 property — or even $35,000 on a half-a-million dollar home — you can see how hard it can be to make a million dollars quickly. In general, most people just starting out don’t get rich with real estate investing. But, you can scale the business with dozens of properties and, ultimately, earn millions in largely passive income by hiring a team of property managers and other experts to help you.

“Your goal with real estate is cash flow,” Singh said. “You want a cash flow producing asset, which means you’re going to make money every month with rent.”

The secret, Signh said, is to use your active income, earned from stock market investing, buying and selling homes (house flipping) or even your job, to ultimately build wealth. “You’re going to take your active income, and put it into making passive income,” he said.

4. Be Patient

When you’re building a real estate empire, you have to understand it will take time. “Flippers make more money in the short term than investors do, but over the long-term the people who make the most money are the investors,” Singh said.

5. Act Quickly and Go All In

Finally, be ready to act quickly when you see a good opportunity to make money on a rental home. “When you see an opportunity, you have to be willing to jump on it,” Singh said.

In 2008, when the real estate crash occurred, Singh did everything he could to find extra cash to invest. “I wanted to buy these properties at a discounted price,” he said.

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Making millions in real estate isn’t a “get rich quick” scheme, but a slow and steady way to protect your assets, gain tax advantages and build wealth over time.

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This article originally appeared on GOBankingRates.com: Jaspreet Singh: How To Make Your First Million in Real Estate