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How To Retire Early By Building $100k In Passive Income Through Real Estate

If you’ve heard anything about the FIRE movement, you know retiring early has been a trend that millennials are jumping on quickly. Retiring early doesn’t mean sitting by the pool and doing nothing for the next 30 years - it means getting yourself financia...

· 03/16/2021 08:34

If you’ve heard anything about the FIRE movement, you know retiring early has been a trend that millennials are jumping on quickly. Retiring early doesn’t mean sitting by the pool and doing nothing for the next 30 years - it means getting yourself financially stable so you can quit your 9 to 5 and do something you love, such as real estate investing.

Whether you retire and invest in real estate or retire and do something you love for a living, like starting your own business, investing in real estate will help you reach your goals much faster.

Before you can come close to FIRE, you must build a passive income and save enough money to live off and still save for true retirement (after age 59 ½). The passive income you acquire will be to help you live off your savings, but not your retirement savings.

Building passive income using real estate is one of the best ways to save $100K and be on the path to retiring early. But how can you invest when you don’t have enough capital?

It’s easy with Roofstock Marketplace.

What Is Roofstock Marketplace?

Roofstock Marketplace is a platform that brings together buyers and sellers but in a way that’s different from any other real estate platform available today.

Instead of buyers looking at homes for sale and doing the legwork themselves to decide if it’s a good investment, Roofstock does everything down to showing the potential net cash flow after expenses.

That’s not all. Most Roofstock Marketplace properties come with tenants in them already. This means you don’t have to look for tenants - they are there for you. When you buy the home, you not only become a homeowner but a landlord too. This means you’re responsible for the home’s upkeep, repairs, taxes, and insurance. But, in exchange, you earn monthly cash flow from the rent collected starting day one.

Roofstock is the one-stop-shop for all investment real estate needs. You don’t need to do any legwork (unless you want to). They provide all the documentation and analysis you need to make a good investment. You can feel good about investing your money in homes found on Roofstock.

How Does Roofstock Marketplace Work?

Roofstock Marketplace brings in buyers and sellers - both of whom pay a piece of the pie when buying or selling a home. Sellers pay just 2.5% of the home’s sales price, and buyers with an accepted bid pay 0.5%. The total commission is just 3% on real estate, which is half of the standard commission real estate agents charge.

To sell a property, sellers apply on Roofstock. Before they get approved, Roofstock puts the home through some due diligence. This includes the following:

  • Property inspection - Roofstock inspectors make sure the home meets Roofstock’s criteria which are the same criteria lenders look at when deciding if a home makes good collateral.
  • Professional appraisal - Roofstock appraises the property to make sure it’s worth enough. If it’s not worth as much as the seller is asking, investors won’t be able to secure financing, and even if they pay cash, they will enter a bad investment. Rootstock doesn’t allow it.
  • Lease evaluation - Since most Roofstock properties already have tenants, Roofstock professionals inspect the lease, its terms, amount of rent charged, termination dates, and landlord responsibilities as outlined.
  • Rent payment history - Roofstock checks the rent payment history of the tenant occupying the property. Does he/she pay the rent on time? If not, they can’t list the home on Roofstock.
  • Evaluate the area - Roofstock also evaluates the area, including the crime rate, school rating, and other important factors to help you decide if it’s a good area to invest in. 

Roofstock leaves no stone unturned. You will know everything you wanted to know and more about a property and its area. This is why investing in Roofstock Marketplace is so lucrative for first-time and subsequent investors. 

How Does Roofstock Earn You Passive Income?

You may not think of investing in real estate as passive income, especially when you’re the landlord and are responsible for all home repairs and renovations. But with Roofstock Marketplace, it is passive income.

Here’s how.

If you buy long-distance real estate, you can’t take care of it yourself. Landlords must be available around-the-clock for any type of emergency. But investing in long-distance real estate is often more affordable.

This is where Roofstock helps. They match you with the right property management service. In other words, you pay a service to manage the property for you while you collect the profits from owning the property and collecting rent.

You are the owner, but you have to do little to keep it up - you pay other people to do it for you, paying it out of your rental income. You earn the passive income, which means you collect monthly payments, and yet you have to do very little work for the home. If you have a portfolio of properties, you’ll make even more passive income.

How To Invest in Roofstock Real Estate

At this point, you may be thinking you don’t have enough money to invest in real estate. It takes hundreds of thousands of dollars after all, right?


This is the beauty of investing in real estate - you can leverage your investment by using mortgage financing. There aren’t too many other investments you can make that allow you to borrow money to invest.

When you borrow money to buy a home, you use the home as collateral. If you default on the debt, the lender can take the home. This is how real estate investors start - they invest a little money and get a solid investment that appreciates and makes even more money over time.

Here’s how it works. Let’s say you found a property for $150,000 on Roofstock, and your lender requires a 20% down payment. You’d put down $30,000 and have an investment worth $150,000.

While the bank owns the home until you pay the mortgage off, you earn the home’s equity, which is the difference between the home’s value and the amount you owe. In this case, you’d start with $30,000 in equity, but as you pay the mortgage balance down and the home appreciates, you’d earn more equity.

Meanwhile, you’ll earn cash flow from the rent tenants pay every month. Since Roofstock properties come with tenants already in them, you earn cash flow from the start.

What Does It Take To Retire Early?

Everyone has different expenses and spending habits. What it takes for one person to retire early may be different from what another person needs.

Ideally, to retire early, you should be out of debt completely and able to handle your expenses with the money you have saved. If you have a dual-income household, you may elect to go down to one income, paying all expenses with that income. You can invest the rest so you can both retire early.

When you invest in Roofstock Marketplace, you can quickly build a passive income balance of $100K, which is a great start to retire early. It won’t be enough to stop working altogether, but it’s a great alternative income stream that helps you get closer to your dream of retiring early.

If you’re thinking about retiring early, make sure you pay off:

  • All credit cards
  • Car loans
  • Mortgage loans on your primary residence
  • Student loans

Don’t leave yourself with any debt that you pay interest on, as that will eat away at your retirement funds.

Building A Real Estate Portfolio

The fantastic thing about investing with Roofstock Marketplace is you don’t have to stop at one house. You can buy multiple homes, continuing to leverage the investment by borrowing or using the equity in your previous investments.

Here’s an example.

You buy a home on Roofstock Marketplace for $150,000. You put down $30,000 and pay the mortgage for two years while also collecting rent. You now have a decent amount of equity since the home appreciated, and you paid the mortgage down.

If you have $75,000 in equity, you can use some of the money to put down on another real estate investment. If you use Roofstock Marketplace, you’ll find homes as low as $50,000 and up to $1 million, so the sky is the limit.

If you keep using your investment properties to buy another property, you’ll build yourself an incredible real estate portfolio that can be your start to retirement.

Using Rent To Build a Retirement Account

The rent you collect is passive income and can help you fund your retirement account. How you invest the funds is up to you. Some people set the money aside in a high-yield savings account, letting the money grow so they can invest in another property.

Others use the funds to diversify in other investments - investments they can earn dividends and capital gains on but don’t have to worry about owning real estate.

A mixture of both is a great way to handle your retirement funds. Passive income can be the driving force to help you meet your retirement goals. 

Anyone Can Retire Early

Today, anyone can retire early, whether you’re 35, 45, or 55 years old. There’s no ‘right or wrong age’ to retire. You retire when you are out of debt and have the money to fund your daily living cost.

You may have to sacrifice both while you save to retire early and during retirement, but the tradeoff is you don’t have to do the 9 to 5 rat race anymore. If this sounds like something you would love, it's time to look at real estate investing for passive income. 

Are You Ready To Retire Early?

If you’re ready to retire early, it’s time to look at Roofstock Marketplace. It’s a great way to start investing in homes, even with only a little capital. First-time investors find the marketplace simple to use, allowing them to invest in properties and earn a passive income to start the path to retiring early.

If you’re thinking about retiring early, get your finances in order, pay off your debts, and see how you too can start investing in properties and earn a decent passive income to achieve your goals. 

Read more about Roofstock: Roofstock Review

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