Amazon has achieved mega-success as an online retailer because they’ve developed: 1) A recurring revenue business model, and: 2) Products that every human needs.
With real estate investing, you can model this yourself, with less effort, and without the need to constantly innovate like Amazon.
You’re probably already paying a monthly income stream to Amazon with your Amazon Prime membership. This year Forbes reported that 64% of U.S. households have one.
This is greater than the percentage of U.S. households that: attend church (51%), have a landline phone (49%), and own a gun (44%).
You pay $99 per year for two-day shipping and other benefits.
Amazon’s income stream is durable because they sell products that you need: paper towels, soap, protein bars, and batteries.
You haven’t cancelled your Prime membership because these mandatory goods are delivered to you through an efficient conduit.
How successful is Amazon’s business marriage of recurring revenue and mandatory goods?
Many expect Amazon to be the first-ever company to hit $1 trillion in valuation! They’re already about halfway there in terms of market cap.
Don’t you wish you could model Amazon?
You can, and you can do it more easily. You don’t need Jeff Bezos’ vision.
You don’t have to re-invent the wheel like Amazon and develop a giant e-commerce platform, shopping carts, and robust search engine optimization.
You don’t have to build fulfillment centers (mega-warehouses) across the world and install cutting-edge robotic automation inside.
In fact, not having to invent such infrastructure and systems is part of the reason that you can be more profitable than Amazon.
How do you develop a recurring revenue business model with a product that people absolutely need like Amazon has? With real estate.
Being a buy-and-hold real estate investor for passive income is a lot like doing what Amazon does.
When you buy an income property, you purchase an income stream called cash flow: monthly rent income minus monthly expenses. Your income stream is durable because housing is not a discretionary product. It’s needed.
This “product” of real estate is where humans sleep and bathe and eat. It is as vital to human existence as the almonds and avocados sold at Amazon’s Whole Foods stores.
Rather than developing an efficient delivery conduit anew like Amazon has, tap into someone else’s by finding a trusted Property Manager. You need sound management to help keep your product viable to a marketplace (tenant pool).
Amazon operates at scale. So can you. You can leverage your money and properties owned 5x with mortgage loans. Your monthly debt payments are completely outsourced to your tenant.
That’s why real estate investing can be a life-changing vehicle for you.
Passive buy-and-hold real estate investing is a successful model like Amazon. Both deliver products of value that people absolutely need, and they’re each done within a recurring revenue business model.
Amazon has their Prime membership fee as their annual income stream. Your tenant rent is yours.
Businesses are successful to the extent that they create value for others. Amazon creates value with household goods. You create value by providing the household itself.
Ultimately, that’s why both Amazon and savvy real estate investors will be successful. Humans just can’t opt-out of food and shelter.
Learn more about savvy real estate investing every week on my Get Rich Education podcast. I also travel the continent and compile top real estate markets, properties, and property managers at www.GREturnkey.com.
– Keith Weinhold
Contributing Writer | Founder & Host of Get Rich Education
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