BiggerPockets

In terms of how much cash you'll need to achieve your goal, it really depends on your investing strategy. The amount it would take as a landlord or holding notes (earning passive income) is going to be different than the amount it would take flipping or wholesaling (active participation).

As an example, a landlord can probably generate 20% cash-on-cash return in this market without too much difficulty.

If you wanted to earn $24-48K per year, based on a 20% return you'd need somewhere on the order of $120-240K of your own cash invested.

Dear RobTheHouseGuy1,

I don't enjoy managing things, but making a good deal makes my juices flow. I guess this makes me more a flipper because I like to see money moving fast. I want minimal risk and little time investment. On the other side, I have something to invest and excellent credit score, no debt of any kind. Because I do have investment money I'm wondering what strategy I should pick.

Minimal risk, little time investment, little cash investment and an output of $2000-4000 a month. Sorry, its not going to happen. You don't say if you have cash to put in, but if you do, there are number of avenues.

You don't say where you are, but that are many locations in the US where you can buy very cheap houses, manage them yourself, do most of the maintenance your self and clear $200 or more a month per house. 10-20 houses would meet your goal. If you pay cash, you can do it with less than that. $20K houses that rent for $500 is feasible in a number of locations. If you don't have a payment and do your own management and maintenance, ten of those would spin off $3000 a month. But you would need the $200K to get there.

Wholesaling might generate that much a month. Not entirely sure, since it seems that most people who try it give up without ever doing a single deal. Guru's often offer this as a quick and easy way to real estate riches. As far as I can tell, the people who have success are the ones who bust their humps.

If you have cash, loaning money to rehabbers can return pretty good money, with less work than landlording. Generating a 12% return isn't too difficult. So, a $200K investment would return you $2000 a month. Unfortunately, its not that simple, because the deals are various sizes. And you have downtime between deals. Its impossible to get every penny of $200K invested every day of the year.

Fix and flipping can generate money, too. Again, though you need some of your own cash into the deal. The rule of thumb is that a purchase plus rehab cost of 70% of the sales price will return about 15% of the sales price as your profit. If you can borrow 70% of the sales price, and have about 15% of your own cash to put in, you can double your money with each deal. Its risky, and you have to know what your doing, and it will take a lot of work on your part, but its possible.

Generally I find that to be true. I've known a few CEOs and other high-ranking executives, and they are ALWAYS very hard working people. The idea that real estate or any other business can spin off lots of cash with no investment of time or money is guru hype. That's a story told by people with something to sell.

Its usually called "hard money lending" or "private money". Rehabbers who are searching for "private money" are usually wanting better rates than hard money lenders.

You don't say where you are, but there are REIAs - Real Estate Investment Associations - in many areas. If you go, you can start chatting with folks and you'll find your way to successful rehabbers and hard money lenders. I've done some of it, but don't have any money invested just at the moment. When it goes well, there is minimal involvement. But when a borrower defaults, you have to step in a pick up the pieces. You also have to get really good at valuations.

Another question - I looked into pre-foreclosure wholesaling and made a contact with a local mentor who is willing to take me as an apprentice. Can someone please tell me what mentors are typically looking for to make it worthwhile for them?

Putting the pieces together, from your post at http://www.biggerpockets.com/topics/62332-what-mentors-are-looking-for- I think you should investigate being a foreclosure data service provider. This combines your interests... your self described "exceptional computer skills" and you are "really curious about pre-foreclosure wholesaling". An example service is http://www.epreforeclosures.com/wake/. Since you have exceptional computer skills, you know (or can learn) how to scrape and deliver data through a paid service using PHP/MySQL. And, no, this is not my site, but I am a subscriber.

All I offered was an option that seems to meet your requirements and/or wants. As Jon said "Minimal risk, little time investment, little cash investment and an output of $2000-4000 a month. Sorry, its not going to happen." I tend to agree with this. Jon's post is spot on. My post just offered more of a, as the saying goes, "Don't Dig For Gold, Sell the Shovel" kind of option that no one else put forth. Marketing and (offshore) software development (since you don't have time) costs a few dollars.

Without knowing your true investment strategy using your criteria (including the 'I don't enjoy managing things' comment) I would recommend staying in "cubicle nation" and either doing as RobTheHouseGuy1 suggested or become a hard money lender.

I hope it's not literally under a mattress. I'm not a financial adviser, but have you considered something like municipal or corporate bonds? Honestly, seems like REI might not be what you are looking for.

Well, when you mislead everyone on what you are doing it is harder to help. SDIRA money isn't "cash" and strategies most people would consider for SDIRA vs. cash are night and day.

This is an interesting thread as I am in similar situation to Sophie but am located in Australia.
Have been looking at ways of generating cashflow.

Could this work, am looking at McDonough GA, purchasing homes around $60K, interest rate of 5% and renting for around $750-800 pm. Please be kind I still have my training wheels on in the US.

Cheers, Marisa :D