{"id":187582,"date":"2026-04-20T11:24:56","date_gmt":"2026-04-20T17:24:56","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=187582"},"modified":"2026-04-20T11:34:08","modified_gmt":"2026-04-20T17:34:08","slug":"7-passive-investments-paying-8-percent-every-year","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/7-passive-investments-paying-8-percent-every-year","title":{"rendered":"7 Passive Investments Paying 8%+ Every Year"},"content":{"rendered":"

Passive income is the engine of financial independence, whether you\u2019re 30 or 65. With enough passive income from investments, <\/span>working becomes optional<\/span><\/a>.<\/span><\/p>\n

But some investments outshine others in paying high yields. And the higher the yield, the less money you need to invest to generate the same income.<\/span><\/p>\n

I\u2019ve personally invested in every one of the investments outlined below, with small amounts through my co-investing club. The numbers aren\u2019t hypothetical\u2014I’m earning them right now as I write this.<\/span><\/p>\n

1. Private Notes<\/span><\/h2>\n

A few years ago, I invested with a house flipper who does 60-90 flips a year. I signed a private note with him at 10% interest, and he\u2019s paid me on time every month since.<\/span><\/p>\n

Last year in my co-investing club, we lent money to a land flipper at 15% interest. If that sounds risky, consider that he put up his home as collateral\u2014with a first-position lien at 65% LTV.<\/span><\/p>\n

I\u2019ve also lent at 16% to a rental investor who sells to his renters on installment contracts. All continue paying like clockwork.<\/span><\/p>\n

2. Real Estate Funds<\/span><\/h2>\n

Another <\/span>land flipping<\/span> company that my co-investing club has invested with offers a fund that pays a 10% distribution each quarter, plus <\/span>another<\/span> 6% if <\/span>they hit their<\/span> profit target.<\/span><\/p>\n

Since the fund launched <\/span>five<\/span> years ago <\/span>or so<\/span>, it\u2019s hit its profit target every single quarter.<\/span> So every quarter, a 16% annualized distribution gets deposited in my bank account.<\/span><\/p>\n

3. Private Partnerships (JV)<\/span><\/h2>\n

The co-investing club I invest with also loves to negotiate <\/span>custom partnerships<\/span><\/a> with active investors. They do the work, we put up the bulk of the money, and we get our share of the profits.<\/span><\/p>\n

Even an example that didn\u2019t work out as planned still underscored how great the model is. <\/span>We partnered with a house flipper <\/span>and<\/span> funded a series of flips and negotiated a minimal annualized return of 8%.<\/span> One of the flips flopped, and it dragged down the average annualized return below 8%. But when the partnership closed out after the prescribed timeline, the operator made up the difference and paid our agreed-upon 8% floor return.<\/span><\/p>\n

We actually just <\/span>finished investing<\/span> money with a builder <\/span>who specializes<\/span> in barndominium homes in Central Tennessee.<\/span> We\u2019re partnering on four builds, each <\/span>of which will likely<\/span> take around <\/span>nine<\/span> months from start to finish.<\/span> Assuming these produce similar returns to the last dozen barndos <\/span>he\u2019s built<\/span>, we should earn a 16%-20% return for each one.<\/span><\/p>\n

4. Industrial Syndications<\/span><\/h2>\n

Last year, we invested in an industrial seller-leaseback deal with a single triple-net lease tenant. In the first few months, it paid a distribution yield of 7.5%, and a year later, it\u2019s paying 9.5%.<\/span><\/p>\n

In fact, the club just finished vetting and investing in a similar deal, projected to pay out virtually identical <\/span>distributions<\/span>.<\/span><\/p>\n

It\u2019s not the first time we\u2019ve invested with that operator, either. <\/span>This<\/span> is the third deal we\u2019ve invested in with them, and a previous industrial deal just closed out a few months ago after a two-and-a-half-year hold. It paid out annualized returns of 27.6%.<\/span><\/p>\n

Some industrial syndications also make <\/span>recession-resilient investments<\/span><\/a>. That first one I mentioned had a backlog of orders over three years long when we invested, and their clients are largely name-brand companies and the U.S. Navy. They\u2019re not going anywhere.<\/span><\/p>\n

5. Multifamily Syndications<\/span><\/h2>\n

Not every multifamily syndication pays distributions <\/span>at all<\/span>, and some pay low yields in the 2%-4% range. <\/span>Others pay mid-range yields <\/span>in the<\/span> 4%-7% <\/span>range<\/span>, and still others pay high yields <\/span>in the<\/span> 7%-10%+ <\/span>range<\/span>.<\/span><\/p>\n

We\u2019ve invested three times <\/span>now<\/span> with an operator <\/span>who specializes<\/span> in workforce housing in Ohio.<\/span> They\u2019ve paid the projected 8% distribution on time every quarter for each one.<\/span><\/p>\n

Another operator we invested with last year also specializes in Midwestern <\/span>multifamily <\/span><\/a>properties. <\/span>They bought a <\/span>huge<\/span> portfolio of relatively small multifamily properties<\/span>, <\/span>scattered across several states, which has already yielded <\/span>enormous<\/span> cash flow<\/span><\/a>.<\/span> It currently pays <\/span>over<\/span> a <\/span>9%<\/span> distribution yield.<\/span>\u00a0<\/span><\/p>\n

6. Mobile Home Parks<\/span><\/h2>\n

You can also invest passively in other types of syndications, such as mobile home parks.<\/span><\/p>\n

Our co-investing club invested in a Nebraska park a few years ago that pays a 10% distribution each quarter. Beyond being a cash cow, it\u2019s also quite recession-resilient, as they\u2019ve systematically unloaded the park-owned homes to tenants. Residents with tenant-owned homes <\/span>almost never<\/span> default on their lot rents, because it costs many thousands more to move a mobile home than to pay the few hundred dollars in lot rent.<\/span><\/p>\n

If you don\u2019t like the <\/span>structure of a<\/span> syndication, you could negotiate a joint venture <\/span>partnership<\/span> with a mobile home park investor and <\/span>simply<\/span> come in as a silent partner.<\/span><\/p>\n

7. Hotel Syndications<\/span><\/h2>\n

We also invested in a boutique hotel operator with a small cabin resort in Southern California. <\/span>They pay distributions <\/span>currently at<\/span> 11%, after starting distributions early and refinancing to return some of our capital earlier than expected.<\/span><\/p>\n

How the Freedom Math Changes with 8%-16% Yields<\/span><\/h2>\n

If you follow the 4% Rule and want $40,000 in investment income, you need to invest $1 million. Even with an <\/span>enormous savings rate<\/span><\/a> as<\/span> I had, it takes at least <\/span>six to 10 years to become a millionaire<\/span><\/a> if you earn a middle-class income.<\/span><\/p>\n

With investments paying an 8% yield, it takes $500,000 to generate $40,000 in income. At 10%, it takes $400,000 invested. At 12%, it takes $333,333. And at 14%, it takes $285,714.<\/span><\/p>\n

And at a 16% yield, it takes $250,000.<\/span><\/p>\n

Yes, I get it: No one\u2019s putting their entire portfolio in assets paying a 16% yield. <\/span>These high-yield investments make up just one <\/span>portion of your portfolio<\/span><\/a>, alongside low-yield investments <\/span>like<\/span> index funds <\/span>mirroring<\/span> the S&P 500.<\/span><\/p>\n

The point remains, however: Passive real estate investments paying 8%-16% yields can help you escape your day job sooner. They can prop up your income, letting you quit and <\/span>pursue your ideal work<\/span><\/a> instead of grinding away at a high-octane job.<\/span><\/p>\n

Imagine putting even $100,000 in a passive real estate investment paying 16%. <\/span>That\u2019s an extra $16,000 <\/span>a year<\/span> in income.<\/span><\/p>\n

I don\u2019t know about you, but that\u2019s no trivial raise. <\/span>This<\/span> is precisely why I keep investing month in and month out in new passive investments, many of which pay high yields like the examples above.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Passive income is the engine of financial independence, whether you\u2019re 30 or 65. With enough passive income from investments, working becomes optional. But some investments outshine others in paying high […]<\/p>\n","protected":false},"author":158586,"featured_media":185212,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7363],"tags":[],"class_list":["post-187582","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-reits-passive-investing"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/158586"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=187582"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/187582\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/185212"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=187582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=187582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=187582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}