Comments on: Is Active or Passive Investing Right for You?

By: Frank

Frank — Sun, 25 Oct 2009 20:47:50 +0000

Ryan, Thank you, This is the type of information I was looking for. Appreciate it. I think I may move into that direction.

By: Ryan Moeller

Ryan Moeller — Sun, 25 Oct 2009 18:50:33 +0000

Hey Frank,

Great question, I hope this answers it. In first position 8-12% is what I see the most. 2nd position 10-15%. I see people asking for equity splits when they are putting up larger sums of money, 100% and usually multiple deals.
.-= Ryan Moeller´s last blog ..Cash Flow Duplex =-.

By: Frank

Frank — Sun, 25 Oct 2009 01:21:44 +0000

What does a passive investor get in return for investing $10K with a real estate investor? Should the money investor ask for $100 a month plus equity or $200 a month w/o equity? What is the practice. Please do not say it depends or what each wants out of the deal because each may be unreasonable. What are the terms that people are doing deals now using. Thank You.

By: Ryan Moeller

Ryan Moeller — Sat, 24 Oct 2009 06:58:55 +0000

I agree Eric. They say about 4% of seminar and bootcamp attendees actually implement what they learn. That means over 95% of those people are better off with a passive real estate investment. Especially since they have some real estate knowledge and should be comfortable with an investment backed by real estate. .-= Ryan Moeller´s last blog ..Cash Flow Duplex =-.

By: Eric Schwager

Eric Schwager — Sat, 24 Oct 2009 05:40:19 +0000

I think the opportunity to act as a private lender in a real estate deals with an experienced active investor is an often overlooked way of getting started in real estate investing.
.-= Eric Schwager´s last blog ..The Top Ten Investor Mistakes =-.

By: Ryan Moeller

Ryan Moeller — Wed, 21 Oct 2009 20:29:37 +0000

Dave, you bring up an interesting point. The 5K was just hypothetical and a private investor must not look at this as a personal loan. The security is the property. A private investor should qualify the deal and make sure they are comfortable with the numbers and risk. It helps to make sure the borrower is trustworthy and has a successful track record and will use the funds appropriately. A personal loan with no collateral is totally different.

Whether a 5K or 5million amount raises a red flag, an investor should always do their due diligence to make the best informed business decision.
.-= Ryan Moeller´s last blog ..Cash Flow Duplex =-.

By: Dave Sharp

Dave Sharp — Wed, 21 Oct 2009 19:53:30 +0000

If someone can’t pony up $5k for a deal, wouldn’t they be pretty risky to bet on?

By: Ryan Moeller

Ryan Moeller — Tue, 20 Oct 2009 23:25:50 +0000

Great question Josh. To answer that I think it depends on the market, type deals and need for the active investor. For instance, many active investors could use a private investor to help with down payments or to cover repairs. 20% of a deal in a market with low price points such as a 50K deal would only be 10K. I have seen cashflow deals for 30K and less even so 5-6K may do it. Or maybe there is a need for 5-20K in rehab. Other scenarios you could need 150K to fund 100% of a Single Family deal. Expensive areas such as Southern California deals could require 300K+ and commercial certainly could require millions.

So to summarize, 5-10K is enough to become a passive investor on smaller deals and you could find great opportunities for 50K, 200K even millions.
.-= Ryan Moeller´s last blog ..Cash Flow Duplex =-.

By: Joshua Dorkin

Joshua Dorkin — Tue, 20 Oct 2009 23:13:26 +0000

How much money would you say someone would need to start with if they were going to go the passive route, then? Is there a minimum you’d recommend?

By: Ryan Moeller

Ryan Moeller — Tue, 20 Oct 2009 22:30:25 +0000

Josh, there is a huge need for private money lenders these days. Anyone interested in passive investing should talk to active investors with a successful track record and ask them about their deals and how they could work together. In fact, most of my private investors came to me and asked about my current/past deals and how we could work together. Then we created a win-win situation. .-= Ryan Moeller´s last blog ..Cash Flow Duplex =-.

By: Joshua Dorkin

Joshua Dorkin — Tue, 20 Oct 2009 22:06:35 +0000

Ryan -
How would you suggest someone interested in becoming a passive investor get started? What do they need to look for?