Affiliate Marketing vs. Real Estate Investing – Which Investment Offers The Best Cash Flow?

Hey! Miles here, this video is
real estate investing versus affiliate marketing. Specifically, I want to help you understand
what is the best investment of your time and or money and what’s going to give you the
best return on said investment. You See, I started both affiliate marketing
and also real estate investing, which I’ve flipped four houses when I had absolutely
no money. So I know personally from experience that
you can do both or either of these with zero money down, but at this point in my business,
I’m generating a lot of surplus cashflow and I’m seeking to reinvest that cash into another
asset that’s going to generate more cashflow. You see, I’m a cash flow investor. I like putting my money’s away to get longterm
cash flows back. So I’ve been running the numbers and the numbers
make a very, very clear picture on which is the best option for me. What’s best for you is up to you, but you’re
going to get to analyze that a little bit based on my kind of understanding and my realization. So first and foremost, I do want to reiterate
that you can start both options with no money out of pocket and you can really use nothing
but effort to get things going forward. Um, I started in the dorms during college
flipping houses. I would go down to the county courthouse,
I would research the list pendants filings I would find who’s late on their mortgage. I would sit down, I would get in contact with
them, I would negotiate a deal and a contract with them. And then I would take that contract around
and market it to the local investors, attempting to partner with those investors on those deals. It’s called wholesaling and I again was able
to do it with just pure effort. I learned how to do it by reading the books
I got from the library and watching the videos and reading the forums. So that’s a possibility. And then affiliate marketing. So I started making money online in 2003 doing
affiliate marketing. Essentially social media marketing mixed with
an affiliate program was enough to generate three, $4,000 a month for over a year. Now that came crashing down because I was
doing it wrong. And today I have some videos. I have a free video series that teaches affiliate
marketing the right way to do it because since we’ve kind of got our feet back under us and
got it going the right way, my wife and I have made millions of dollars online. So those are my two options, right? I’ve got, I’ve got some funds aside allocated
for investing and it’s like, which ones are going to be a better use of the money? So I ran the numbers and I started in real
estate. Now I’m familiar, I’m very familiar with this
specific real estate market and in that market I know that I could get a great single family
home for about $225,000 now if I’m going to do a 20% down mortgage on that, it’s going
to cost me about $45,000 down. And I obviously expect there’s going to be
some paint, some carpet, some work. So I’m minimum looking at about $50,000 down. Now. The rents in this area, the rents in this
neighborhood, and let’s go real quick. The mortgage on the note that’s leftover is
about $900 per month on that. So, so at one 85 borrowed, and it’s about
$900 a month on the mortgage on that note. So the rents in this neighborhood could hold
up to about 1500 per month. So that’s a $600 per month, potential cash
flow. But I am not physically in that location. I travel all the time. I already have two places in very different
locations and I’m looking at a tropical place next. So I’m, I’m a nomad in some senses, so I’m
not going to be managing this. So there’s 10% right off the top for property
management, which brings my actual cash flow down potential by $150 per month. And then you need to have what’s called a
cap ex account. That’s a capital expenditure account. And essentially on a house, you’re going to
have a roof that goes bad at some point that needs repair. Uh, the water heater is going to go out, the
furnace is going to go out, all kinds of things happen to houses and you need to be ready
to have essentially the house account pay for those kinds of upgrades, right? You don’t want to go out of pocket deeper
for those kinds of upgrades. This is a capital expenditures account and
what I would do is 50% of the income of the profits that comes in from that, it would
go into a separate capital expenditures account until I had six months of rent sitting there
because once your lease is up, you never know. You might have two or three months of vacancy
in there, which means ultimately I would expect something to the tune of about 225 to $250
a month. Positive cash flow today in my pocket. Okay, so that’s about $50,000 in and sure
it’d be building its cap ex account. I get that, but that’s not my money. That’s the house’s money, right? To keep the house going. And I would get out of $50,000 in approximately
$250 per month, maybe $300 a month. There’s probably some markets in the country
where I could get 400 or so dollars per month. Now let’s go ahead and run the numbers based
on a affiliate marketing site. One of the things I love about affiliate marketing
is you really can hustle it up from ground zero. When you’re doing the world of real estate
investing, you definitely need some other people involved. You need to find a seller. You then need to go find some investors to
buy that deal from. As a wholesaler, you’re playing the middle
band game, but when you do affiliate marketing, it can literally be you, your laptop at night,
just grinding it out in the evenings after the kids and the wife or husband goes to bed
and I love that it’s that you can be that resourceful with it. Now. With that said, I don’t have much time to
dedicate to this, so I’m taking a pay someone, a essentially a content team and a project
manager to do the actual work for me and I’ve been running the numbers on this and my expectation
is to spend again, $50,000 to put into this website and based on that Niche I’ve chosen
based on the site based on kind of some longterm averages that I’ve seen from my business over
a very long period of time. And also talking with some of my friends who
do this professionally as well. I’m quite confident that I should be able
to get upwards of $3,000 per month positive cash flow from a $50,000 investment. Now, if you think about those two numbers,
it’s a distinctly different result. On the other side, neither of these are passive
passive income as a complete line. Both of these are very active income. Even me as the one who’s Gip just putting
money in the direction, right? I’m essentially giving money to a project
manager. I’m giving money to a team of writers. I still have to choose them. I have to choose. There’s a lot of choices. There’s a lot of involvement from me. I’ve just made it as hands off as possible
so it’s, it’s very residual and it’s recurring income, but it’s absolutely not passive because
I do still need to be involved. I still need to guide the ship and steer the
ship, if you will, but even if I’m 50% wrong, right? Let’s say I don’t get 3000 but I only get
$1,500 a month positive cash flow off of this site, that actually means that I’m still doing
upwards of five times as good if not more compared to the real estate investment. There’s no gigantic bank involved. My credits not on the line. There’s no real kind of liability behind the
Internet based route and then you might be thinking, well miles, but I could eventually
sell that asset. I can sell that rental property. You can and you will absolutely pay capital
gains on that unless you 10 31 exchange it and there is a huge second hand market for
profitable affiliate websites. You can sell them for 2030 even sometimes
upwards of 40 x your profit multiples, which is kind of a crazy number. So you can easily sell these things for a
hundred to $150,000 or more for these website. There’s a really big market place for those,
so it is also a saleable asset, but again, I’m not in it for the big hits. I want to get that longterm consistent cashflow
that can pay off beach houses in the tropic, right? That can be reinvested in essentially a portfolio
of websites, let website a pay for B c, D and build a portfolio of seven or eight sites
that together generate 20 $30,000 additional cashflow for me, my family, my business, et
cetera. That’s my ultimate plan. So to me, the numbers clearly point to affiliate
marketing. Now, I also have an affinity for the world
because I’ve been working online, I’ve been making money online since 2003 the good news
is that affiliate marketing today is probably a better opportunity than it was back in 2003
when I first got started. There’s billions of people connected on social
media now. That was not the reality in 2003 youtube is
a thing that was not a reality. So number one, to train yourself on how to
build an affiliate marketing website, the youtube tutorials are there to help you to
learn how to do content research, to learn how to write SEO content that ranks fast. I teach that for free right here in Youtube. That was not an available resource, but on
the other side, you could even leverage video marketing for your affiliate marketing game,
which obviously was not an opportunity back then. Also, one of the big changes that’s happened,
excuse me, since 2003 when I first got started, everyone now has super computers in their
pocket that are always connected to the Internet and we are now realizing that the world of
the Internet offers us these extremely specific answers to all of our extremely specific questions. If you look behind me, you might notice that
this Green Hill side back there, that’s about a quarter acre on this side, and I’ve got
about 21 acres behind you. Uh, there’s a lot of mowing to be done here. So I go on a research, what’s the best mower,
what’s the best riding mower? And sure enough there are specific websites,
review based websites dedicated to helping me choose what the best writing mower is,
which is upwards of a 2,500 to $3,500 purchase. And that affiliate who actually connects me
with the mower that I want, that’s going to be best for my land and my current situation
where I’m at, that person could earn a five to 10% commission and that’s a pretty big
commission on that sale. So what I’m getting at is the world of these
micro niches is absolutely exploding from racing drones to horseback riding saddles
to English, horseback riding boots. There’s all kinds of interesting ways that
one could build an affiliate site in something they enjoy or something they have to deal
with anyways. Right. I have to deal with mowing this multiple times
a year anyways, so I could, if I wanted to build a brand around that now potentially. And you need to have a good accountant on
your side potentially. There’s an opportunity for me to buy lots
of riding mowers, lots of weed, whackers, lots of lawn care equipment, do reviews on
the different lawn care equipment by being out here doing something I’m already going
to be doing anyways and I may very well be able to write off all of those expenses because
I’m creating review based content on each and every one of those pieces that is not
required. That is a potential perk. And again, you need to have an accountant
on your team who understands how this game works and how the whole kind of research and
development side of being an affiliate works because theoretically that very well can be
a deduction. So the world of Internet marketing, affiliate
marketing can open you up to a lot more, uh, business deductions as well, which is kind
of just a nice little icing on the cake for the right type of person. I hope you found this video to be helpful
and interesting. I think that both are great ways to grow wealth. I know for a fact that real estate investing
is one of the long strategies that has been absolutely proven to create wealth in our
world and if you’re good at it, if you have trades based skills, if you’re handy, if you
know your market in your area and you’ve got a surplus of cash that is still very well
may be a great opportunity for you to reinvest your cash along with a team who’s going to
manage that and run that for you or you might want to keep that extra 10% and play landlord
yourself. It is a business, so treat it like a business. Don’t think it’s passive because it’s not. You need to be actively involved to manage,
maintain, improve your asset to find those right kinds of tenants who are going to be
around for years and years and they are going to improve your property for you. Then on the other side, the affiliate marketing
game, you can start from nothing but if you’re in a position where you want to just throw
money at it to really grow the asset. There are teams, there are places you can
go purchase entire websites that are already built. You can hire entire teams to do all of the
work for you. Ultimately creating a pretty good residual
cashflow stream and in my numbers and running the numbers for myself, I see massive potential
in the affiliate marketing side compared to the real estate side, which is exactly why
I’m starting an affiliate marketing division within my business that’s going to go create
and market these new types of sites. They’re basic review sites. I’ll be explaining more about what I’m doing,
the exact costs involved, where I’m going to purchase these websites, where I just purchased
the one that I’m running with, where I’m getting all my content written from. I will be sharing that in the future and if
you want to be sure to get those updates, hit the subscribe button and more specifically
once you do that, hit the bell so you get notified. When my new videos come out, my team and I
are finishing up our writeup of month one from this project where I’m going to detail
out all of the different numbers and where we went to get all of the bits and pieces,
so this was the framework. This was the big idea of which option do I
choose and now we’re going to start the process of documenting growing the site. I’m going to track it each and every month,
how much I’m investing. Well, my total investment is and how much
money it starting to kick out on the other side, and we’re really gonna track this to
see, can I get to that three grand a month positive cash flow mark for under $50,000
even if I get to $2,000 a month or $1,500 a month for around that 50 grand number, that
is going to be a wildly successful investment for me in my brand. Is that right for you? I don’t know. You need your own investment strategy. I’m not an investment professional. I’m just telling you what I do and I’m telling
you the numbers that work for me. I appreciate you. I thank you for your time. Give a thumbs up, share like do what you do,
engage. I appreciate you and be sure to subscribe. Hit that bell. I’ll catch you on the next video till we meet
again. Be well. Cheers.

21 thoughts on “Affiliate Marketing vs. Real Estate Investing – Which Investment Offers The Best Cash Flow?

  • If you want to start with zero investment, affiliate marketing is the good start. You can also do that on real estate, but it will take time. If you want to start RE, rental would be a good start. Money in, then add new ones to leverage. Ask Pro for advice my statement is not an investment advice.

  • Both can be great.. however it takes time so you have to be patient and consistent! Great video Miles 🙂

  • Affiliate marketing is great, but nothing is without a cost. Everything must be managed with the focus and mindset of a professional. All consistent wealth creation, takes substantial sustained effort over time. And you must learn to acquire an audience. Which is becoming harder as these channels become more and more saturated. Feels like podcasting is still in relatively earlier days. I have also had a lot of luck leveraging reddit to drive traffic back to youtube. However, the title of this video is a little off (but good for clicks). Real estate is not a v.s… it is more of a long-term wealth storage mechanism… And given the tax advantages, there is not much that can beat it. Good luck my friend – you continue to inspire me.

  • Thanks for the video. I believe there is so much more to real estate investing in addition to positive cash flow : 1) leverage 2) control 3) tax incentives 4) appreciation 5) depreciation. In my mind, Ideally, some portion of cash flow from affiliate marketing should be invested in the historically proven Tangible asset – real estate.

  • Most major real estate markets are starting to decline after an 11 year bull market and rebound from the 2nd Great Depression in the U.S.

    Wholesaling and flipping can be done in a downturn but you really have to watch your numbers and be sure to buy it at the right price. It requires smarts and skill overriding desires and dreams.

    Whenever looking at real estate for asset appreciation it’s recommended to get a 30 to 50 year median price chart for that area. The chart will tell you where the market is and where its going. Real estate moves in trends that last for years, smooth price lines that are easy to see and predict. Right now most of those charts would be telling you to avoid real estate for a few years. Once it’s declined for a few years the timing will soon be close to buy and ride the coming upswing. Most profits will come from the most volatile markets, usually on the coasts. Big price swings bring big losses to those who buy now but also big gains to those who buy when the market’s been down for a few years.

    The digital age and the endless opportunities it brings has replaced real estate as the most attractive and monetarily rewarding investment venture.

    But I’m a real estate buyer in a few years when we’re in a normal down cycle and it’s all ugly to everyone else.

  • $3K per month on 50K investment would be awesome. Less than 2 years to double your money. Rental properties are also good, but only if you buy right. There is more than just cash flow. You have debt pay down, appreciation, tax benefits (depreciation) and deferring taxes like the 1031 exchange. But hard to beat your affiliate example unless you got a killer deal. Rentals can be pretty passive most of the time for good long term tenants, but can be annoying when you have to deal with a turnover. Good post! 🙂

  • I’ve done/do both and the points made in the vid and echoed in the comments are spot on. Another consideration is that the local and national real estate market is directly impacted by broader systemic factors; you can do everything right with your RE property and still lose money. Some could say the same about SEO and affiliate marketing but I think the risk/reward is quite different, and the market is still in (relatively) early days.

  • I do both, im currently building my affiliate marketing biz! here in UK i'ts almost impossible to get into real estate without investment!

  • I've been pouring over distressed ecom sites to see if there are any bargains out there. I look fwd to hearing your approach to affiliate marketing with the hope that I can incorporate some ideas to build on before proceeding.

  • Interesting. That's very similar in some respects to what I've decided to do. My dominant business was in tutoring and test prep. I also do football training. While at this point I'm not hiring a team, I am building out content in each area. I'll do two-three videos per week, mixing in practical tips and reviews. Sometimes I'll have affiliate links, sometimes it will be my products. I originally was going to wait until I built my own products but I've been converted!! Thanks for sharing this info. I have no shortage of potential niches. I am looking forward to bringing on others to help execute.

  • As a RE guy myself, I’d add one thing. In the example given (50k investment), your affiliate site could make no money, in which case it would have no value on the resale mkt.

    You’d be out 50k. If you’re buying starter rentals, as an example, with the 50k, it would be far more difficult to lose 100% of your investment.

    Not that it tips the scale to RE, but adds more nuance to the pros/cons.

    As always, great vid miles! Thank you

  • *Хочешь узнать интересные фразы на английском??? Переходи на мой канал!!!

  • I read your email on this idea 2 days ago. I think the potential you can create with affiliate marketing is way bigger! Throw in wonderful people & opportunities you have along the way. Yeah, keep growing & glowing! All the best Miles!

    For those who want to invest in Real Estate, in Singapore, we have REITS (listed business trust with real estate asset – shopping malls, hotels, hospitals etc) and they are required to distribute at least 90% of the incoming cashflow after paying for cost.

Leave a Reply

Your email address will not be published. Required fields are marked *