Creating Passive Income for Senior Parents through REI

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Creating Passive Income for Senior Parents through REI

Anya Stewart
Member since 2022 · 7 posts · 2 votes

Hi! So excited to be a part of this community. 

I am planning to move my parents to the US soon within the next 1-2 years. 

I have good chunk of cash to work with and I am trying to think of passive income strategies for them. Passive for them, because they will be adjusting to the life in new country and advancing their English (at beginner/intermediate level now). They are in their "young" 60s, I can see them working part-time eventually to integrate better and contribute to the local community. I live in LA, so I will be moving them somewhere here. It also has to be passive for me (eventually), because I actually like my current W-2 job and would want to stay with it. 

I have been doing a bunch of research and I realize that I need to focus on Multi-Family properties that could bring the highest cash-on-cash flow. Which is sadly impossible in California. Would that be the right to try and find something out of state in that case? 

I am a very beginner in real estate, I don't even own my own home. So I would want to start small first, let's say put down 30k, see how it all works and then buy more / pay down the loan. Hope to find smth with at least 10%Coc. 

I've been doing research on best states to invest, companies like Rent to Retirement, started talking to some realtors, but not set yet on the best way to proceed. 

Would love to hear any thoughts on this. 

Thank you, 

Anya

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Joseph Crunkilton
Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
3y

Hi Anya, 

I've used RTR as well and had a good experience. Just a heads up, no REI is passive unless you're doing REIT's. There's always a bit of work on your end although RTR makes the process smooth.

I bought my first property for 20k down. 30k is close to enough to get you into one. I bought it right out of school while living in a small apartment. You don't need to be an expert, the best teacher is firsthand experience.

Let me know if I can answer any questions!

@Zach Lemaster

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  • Ruchit Patel
    Bay area, CA · Member since 2021 · 383 posts · 306 votes
    3y

    Yes, California is not the place to find cash flow. I live in the bay area of California. I know that feeling.

    Yes, turnkey providers such as Rent To Retirement are one of the best ways to passive income.

    Instead of reinventing the wheel, I decide to invest with them, around 2 years ago. If you want I can discuss my experience with them in detail. 

    The best way to learn something is by doing it. I like your idea of putting $30K down to get 10% coc and learning the process. 



    3Reply
  • Deidre M LewisPro Member
    Member since 2020 · 8 posts · 2 votes
    3y

    Good evening,  


    can you share with me your experience 

    0Reply
  • Joseph Crunkilton
    Rental Property Investor · Oregon City, OR · Member since 2020 · 324 posts · 780 votes
    3y

    Hi Anya, 

    I've used RTR as well and had a good experience. Just a heads up, no REI is passive unless you're doing REIT's. There's always a bit of work on your end although RTR makes the process smooth.

    I bought my first property for 20k down. 30k is close to enough to get you into one. I bought it right out of school while living in a small apartment. You don't need to be an expert, the best teacher is firsthand experience.

    Let me know if I can answer any questions!

    @Zach Lemaster

    3Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    3y

    Echoing @Joseph Crunkilton, buying rental houses is not like buying treasury bonds or shares in a public REIT. Effective rental real estate management requires work and attention on your part, sometimes, a lot of work and a lot of attention even {when you have a management company helping cover your interests). Moreover, you should not expect a smooth revenue line over any reasonable time period (as you would in a truly passive scenario). Vacancies, non-paying tenants, late paying tenants, unexpected capital expenditures and variable maintenance expenses will inevitably negatively impact your monthly and yearly numbers. If you are looking for a "set it and forget it" investment strategy, acquiring rental houses is probably not the right one for you.

    1Reply
  • Anya Stewart
    OP
    Member since 2022 · 7 posts · 2 votes
    3y

    @Darius Ogloza I'm hoping to spend some time setting it up and learning the ropes, so that eventually I can give it to my parents to manage. 

    I already have some REIT, stocks, CDs, Fundrise and other things that are truly passive. I think this is a next step for me as an investor and also a next step towards diversifying.

    1Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    3y

    @Anya Stewart Not trying to dissuade you from having a go at it. REI has done a lot for me personally over the years. Just hate to see anyone go into it without eyes wide open.

    0Reply
  • Anya Stewart
    OP
    Member since 2022 · 7 posts · 2 votes
    3y

    @Darius Ogloza may I ask - what was the worst thing that happened with your REI?
    Have you used a company like Rent to Retirement? 

    I appreciate your comments! The goal of this is to create an income stream for senior parents, so I want to be very careful. 

    0Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    3y

    Hate to jinx myself by identifying a "worst thing that happened (as that can easily occur in the future).  I have purchased properties in distant "cash flowing" markets, most notably 8 duplexes in Rochester NY starting back in 2004 (this was pre-Zillow when available information was much scarcer than it is today).  I am a big believer in doing my own research on properties and markets and developing my own local contacts. I have never purchased properties from any wholesaler or turnkey vendor.     

    0Reply
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