Passive R/E Investing

So you’re thinking about passive real estate investing, maybe as an alternative to active real estate investing. The great aspect about real estate investing is that there are so many options, so much so that it can become overwhelming.

Well, over the years I’ve learned about the many ways that one can earn a good return in real estate. Believe me….. it’s not just about being a landlord which not everyone will enjoy. I own and manage rental property in Oakland but I’ve also rehabbed and resold properties in Berkeley which is an entirely different experience.

Consider what your strengths and challenges are in regards to your expertise, time, preferences, and resources. Don’t just pick one approach at random. The best thing you can do after realizing your real estate interest is to educate yourself on the different niches to determine which one fits you best.

There are many different ways to passively invest in real estate:

One approach is to invest as part of a group. This group can be structured as a partnership, or it can be set up as a syndication with you as a limited partner. A syndication is a structure where there is a main sponsor, or operator, that puts together a deal to purchase and manage the property and you invest as a limited partner and essentially buy a share of the deal. Syndications typically buy large apartment complexes or other large commercial projects.  A smaller group, structured as a partnership, may more commonly buy single family homes, or smaller apartment buildings.

Other approaches to passively invest in real estate are:

  • Tax Lien Sales
  • Purchasing Notes
  • Hard Money Lending

These approaches are certainly less active than managing a rehab project or rental property however you typically will be engaged in other activities aside from simply investing your money and expecting a given return over a specific timeline.

If you are interested in discussing and learning more about passive investing I would be happy to talk.