Interested in investing in real estate either actively or passively

[Christopher Costea]

Hello all! I really appreciate anyone’s help or guidance. Currently live in NY. I think the tristate area is too expensive to invest in general at the moment. I am open to investing out of state although I am a novice with limited exposure in real estate investing. Currently have a mortgage that is quite high without any other debt. My wife also works together we make a decent income. I work in medical field and so does she. We just had our first child, and I would like to diversify our investment portfolio. At moment I spend about 40-50 hours a week towards my job so I don’t know how time I could dedicate to actively investing. I was looking at syndications but I have no idea where to start. In future maybe I will be able to spend more time investing, I am also getting my MBA part time so its not realistic to manage a multi family at this time. 

[Evan Polaski]

@Christopher Costea, I know you already have your mind set on real estate, but why?  

Not implying it is a bad investment, per se, but unless you understand how to maximize values and what risks are appropriate to take, you might as well throw your money into a money market or S&P index fund.  

Things to consider first:
Can you afford to lose your $50k?  If the answer is no, then you should stop now and find a money market.

From there, where are you seeing the macro environment taking real estate and specific subclasses?

Whether you go active or passive, you need to know what you are doing.  Active will entail traveling to markets to see what you are buying, managing property managers (which tend to range from just okay to terrible), managing bookkeeping and the few expenses that don't flow to manager, i.e. insurance, taxes and mortgage.

Active can be anything from sourcing everything your self to trusting a turnkey listing group, but if it were my $50k, I would not just blindly trust any listing service (MLS or turnkey), regarding quality of area, tenant base, management, etc.

On passive, your diligence is different.  Your work is all on the front end, because once you are in, you are in.  This is getting to know team, track record (both full cycle deals and current performance of portfolio), what is the business plan, who is managing properties, who is tenant base, what is financing structure, what happens if a supplemental capital call is needed?  On top of many more questions.