Chris Larsen wrote his book, Next-Level Income, to illustrate how the goal of investing shouldn’t be just about money. This book is not only about investing in real estate; it is about the search for financial freedom and the freedom that it can provide in your life. In the book, Chris shares some of his life experiences and why he now invests in real estate. His mission in writing the book was to help others achieve financial independence.
Episode Highlights Here:
Chris
In general, you can’t keep more than you make. So you want to keep as much as possible. This means you need to have the proper entity structures in place. This means you have to have the proper tax strategies in place. And this means you have to have the proper legal structures in place.
Brett
So let’s dive right into the secret: are the top secrets to building these six figures of passive income? So what is the number one secret to doing just that?
Chris
Yeah, so I think the first step is, and this is people are going to be like, Oh, I was, I was hoping for something more shocking, to make more money. So in my book, which you can get a free copy at next level income.com, I talked about three steps. And this, this is as easy as teaching my 1113 year old boys. Number one, make more money, find a high income, career, profession or business where you can become accredited. So I think the key is to make $200,000 or more a year in income, that’s going to allow you to have capital that you ultimately can invest and more capital, more opportunities, that’s ultimately going to lead you to more freedom.
Brett
Excellent. So rule number one, or seeking number one is to make more money to earn $1,000 or more. So you become an accredited investor. Chris Larson, what is the secret number two due to having six figures of passive income?
Chris
Yeah, so this is something that Brett you and I’ve talked about a lot having you on the show, number two is going to keep more of that income. So you hear the adage, it’s not what you make, it’s what you keep. And, again, it is what you make, because you can’t, you can’t keep more than you make. Although there are some, there are some ways to do that if you’ve made money in the past, or you get tax credits from the government. But in general, you can’t keep more than you make. So you want to keep as much as possible. This means you need to have the proper entity structures in place. This means you have to have the proper tax strategies in place. And this means you have to have the proper legal structures in place. Because there are three insidious things that can steal that can rob you of the money that you’ve made, those are taxes, this is going to be probably your biggest expense. If I can say hey, you can keep 50% or double what you’re taking home from tax strategies, that’s, that’s more than most investments are going to be able to give you. Number two is a major health crisis. And this could include death, my father passed away when I was five years old, which was a big motivator for me to now spend time with my children, my two boys, because I value how precious life is. So you have to have the right life insurance, you have to have proper health insurance, proper disability insurance in place. And the last one is lawsuits. Somebody can sue you whether you have your own real estate, your own business, I worked with doctors and surgeons for a lot of my career. And unfortunately, I saw a lot of them. They were sued by patients. And sometimes they were sued, just you know, they were brought in a lawsuit that had nothing to do with never even seeing the patient but got sued because they were on call or something like that. So you have to have the right insurance, you have to have the proper legal structures. So if you have a property, it should be in the proper legal structure. So you need to consult with the right consultants. And to make sure you have those things in place. Again, Brett, what you do with your company, it also helps in a big portion of that key portion of the make keep and grow strategy.
Brett
Absolutely. That sounds great, Chris, so secret number two is keep more income. Second one is to make more income. And when you’re keeping more income. Remember you had the proper tax, legal and insurance, tax tax strategies, legal structures and proper insurance in place. That is secret number two, Chris, what is secret number three to building six figures of passive income?
Chris
Yeah, so this is really the fun part, right? So you’ve done the hard work, you’re making a lot of money, you’ve got the right tax, write legal and right insurance structures in place, you’re keeping as much of that money as possible. Now you can look to grow your money, this is the MC keep and grow strategy. And you have to decide if you want to be an active investor or a passive investor? I personally think if you’re an active investor, you should be making significantly more than if you’re a passive investor, because you’re investing your time you’re investing your credit, you’re investing your personal risk in those investments, or do you want to be a full full time passive investor? Both of these are great options. And I personally think you should have a blend of the two. There’s a lot of different investments out there. So you need to work with somebody that can help you decide what type of investments fit for you. Is it real estate? Is it multifamily real estate or self storage? Or is it something that’s more active like short term rentals? Like car washes, we’re a big investor in car washes both here locally, in smaller washers, as well as regionally. They’re more of a business. So that’s going to be something that you can do that you can buy businesses and invest in things like those, but you need to know the right questions to ask you need to know how to analyze them. In our course we have a spreadsheet. It helps you learn the proper questions to ask potential syndicators that you want to work with helps you analyze these investments and ultimately quantify the returns that you’re going to get and rank them and see hey, are these the right investments for me, but take a step back Before you, you dive in doing investments if you’re like, oh, great, I’m going to start investing in these different things. You need to determine, Hey, what is your investment strategy? What is your investment thesis? What do you enjoy investing in? Where do you want to invest? Because where you invest, in my opinion, as we’re more important in what you invest in, and ultimately who you invest with, if you’re going to be investing in passive investments, like syndications like we do, you need to make sure that you trust those partners that you work with. So again, make more money, keep more of your money, and then grow your money by learning about active and passive investment options and partnering with those that can help you grow your portfolio
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About Donny Coram
Christopher Larsen is the founder and Principal of Next-Level Income. After 18 years in the medical device industry he dedicates his time to helping others become financially independent through education and investment opportunities. Chris has been investing in and managing real estate for over 20 years. He has experience in development, private-lending, distressed debt as well as commercial office, and syndications including assets across: multifamily, self-storage, hotels, mobile home parks, car washes and senior housing. Since 2016 he has been actively involved in over $1.5B of real estate acquisitions.
Chris holds a B.S. in Biomechanical Engineering from Virginia Tech and a M.B.A. in Finance from the Pamplin School of Business. In addition to real estate, Chris was an All-American cyclist while in college and has held multiple state championships, podiums in national championships as well as top-10 in world championships during his cycling career. Chris lives with his wife, two boys (and Vizsla, Lucy!) in Asheville, NC where he loves spending time with them outdoors and enjoying the food and culture that the region has to offer.
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