Interested in investing in real estate either actively or passively
Member since 2023 · 15 posts · 6 votes
Interested in investing in real estate either actively or passively
Most Popular Reply
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
1y@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.
13 Replies
- 1yBernice RetzloffPro MemberMemphis, TN · Member since 2024 · 234 posts · 100 votes
Congrats on the new baby and props for even thinking about investing with everything on your plate! With your schedule and goals, it makes total sense to lean toward a more passive route for now. Syndications can be a good option if you’re looking to diversify and want hands-off cash flow and appreciation, but since they can vary a lot in structure, minimums, and transparency, the key is vetting the operators thoroughly and understanding the deal inside and out.
Alternatively, investing in a fully managed, turnkey single-family rental out of state (like in Memphis) could be a nice middle ground! It's a real asset in your name, provides monthly cash flow, and doesn’t require much of your time if you work with a solid team. Markets like Memphis are attractive for that! Low entry points, landlord-friendly laws, and property management baked in. You’d be surprised how many medical professionals take this exact route to start building their portfolios while keeping their work-life balance intact. Happy to share more on how that works if you're interested!
- 1yMelissa JusticeBusiness MemberRental Property Investor · Phoenix, AZ · Member since 2024 · 518 posts · 1k+ votes
Congrats on the new baby and on thinking long-term about building wealth through real estate. You’ve got a strong income foundation, and even with a packed schedule, you’re doing the smart thing by considering passive investing options that fit your lifestyle right now.
You're absolutely right - the NY tristate market is challenging, especially if you’re looking for decent cash flow or less management-intensive opportunities. And with your current time demands (medical work, MBA, family), it makes total sense to start with truly passive or low-maintenance investments.
Syndications are a great way to diversify into real estate without becoming a landlord or operator. You’re essentially investing as a limited partner (LP) into larger deals - apartment complexes, storage facilities, or commercial assets - that are managed by experienced teams.
Here's what to know as you start exploring:
Pros: Truly passive, solid returns (often 6–8% cash-on-cash + equity upside), tax benefits, no management stress
Cons: Capital is typically tied up for 5–7 years, not liquid, and you need to vet sponsors carefully
Minimums: Most require $50K–100K per deal; some allow $25K to start, especially via crowdfunding platforms
Start by:
Listening to podcasts like Passive Real Estate Investing (Marco Santarelli) or Real Estate Syndication Show
Checking out platforms like CrowdStreet, RealtyMogul, or Ashcroft Capital’s educational resources
Asking sponsors: "What’s your track record? Have you gone full-cycle on deals? What are the preferred returns, and how is risk split?"
Alternative: Turnkey Rentals in Landlord-Friendly States
If you want a little more control and ownership but still need it to be passive, consider buying a turnkey property in a stable, cash-flowing market with property management already in place.
Markets like:
Indianapolis, IN
Birmingham, AL
Ocala or Citrus Springs, FL
These are great for high-income W2 earners who want monthly cash flow with little to no hassle. You can often buy fully rehabbed homes with tenants in place and net 6–7% returns after all expenses.
You’re laying the groundwork now while balancing a demanding career and family and that’s something a lot of us in this community can relate to. As your bandwidth expands later (post-MBA, maybe fewer hours in the field), you’ll already have experience and passive income working for you.
For now, I’d recommend:
Learn the basics of syndications and passive investing
Vet a few sponsors or platforms and invest small to start ($25K–$50K)
Consider 1–2 turnkey rentals with PM in place if you want a blend of cash flow + equity
You’ve got the income, mindset, and long-term vision! Now it’s just about aligning your strategy with your time capacity.Happy to chat more about specific markets or run deal scenarios side by side :-) You’re on the right track! Welcome to the journey!
Best of luck,
Melissa
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @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.
If you are working 40-50 hours and have a baby and getting a MBA my recommendation would be to go the passive route. You are going to bite off more than you can chew trying to be an active investor.
7e investments53 Reviews - Member since 2023 · 15 posts · 6 votes1y
I appreciate the honesty. What passive methods of real estate would you recommend me investing in?
- 1yKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votesGiven your busy schedule, I’d recommend starting with passive investments like syndications. They’ll allow you to invest in real estate without the time commitment of managing properties yourself. Focus on partnering with experienced syndicators who have a solid track record, especially in markets like Ohio, Texas, or Georgia, where entry costs are lower and cash flow potential is strong. It’s a good way to diversify your portfolio while keeping things manageable for now. As you get more time, you can dive deeper into real estate.
Quote from @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.
Kerlous Tadres | Reafco Real Estate541 Reviews - 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location/neighborhoods to invest in.
Why is Property Class so important for investors to understand and apply in their investing strategies?
Because the Property Class dictates the Class of the tenant pool that the property will attract.
The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.
Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.
If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?
Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?
So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.
We use the following to rank Property Classes, in order of importance:
- Property Tenant Pool: closely linked to location, but not always.
- Property Location: closely linked to tenant pool, but not always.
- Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”
Key metrics for each Property Class:
Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.
Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.
Where did we get our FICO credit score information from?
Check out this chart:
FICO Score
Pct of Population
Default Probability
800 or more
13.00%
1.00%
750-799
27.00%
1.00%
700-749
18.00%
4.40%
650-699
15.00%
8.90%
600-649
12.00%
15.80%
550-599
8.00%
22.50%
500-549
5.00%
28.40%
Less than 499
2.00%
41.00%
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
Metro Detroit has 132 cities, the City of Detroit 183 Neighborhoods, which we’re analyzing and classifying. Check out the map on our website where we’ve made this all easy to follow.
We can also share numerous examples of properties & portfolios we’ve assisted investors with!
DM us if you’d like to discuss this logical approach in greater detail!
Logical Property Management4.9460 Reviews - 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
based on what's in your post i agree that active investing is probably not a great option at this time. but, that doesn't mean you can just pick a passive option and start easily making great returns.
i strongly believe that syndications are a DIVERSIFICATION STRATEGY for HNWIs and NOT a beginning investment strategy. said another way, if you have 50K to invest, you don't just put 50K into a syndication - that's a terrible idea. and, if you don't know anything about syndications and don't know any syndicators... maybe they're not a good fit for you yet.
if you browse the forums you'll see a lot of folks who got burned by syndications they assumed were basically guaranteed that did not do as well as they'd hoped.
not trying to be negative just trying to help. happy to dialogue further
- Dallas, TX · Member since 2024 · 9 posts · 1 vote1y
I've worked with clients in that area and their best resource was other investors. My professional opinion is that you hit up some REIAs in the area, make some friends and see what kind of local deals you can dig up if you want to start locally.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes1y
Total stock market index fund for a truly passive investment. When you are at a point where your jobs/kids don't require as much time it might be more favorable to take a stab at REI.
- Investor · Los Angeles, CA · Member since 2020 · 102 posts · 94 votes1y
Based on what you described the passive route would be a better option. However, it would still require a time investment upfront to learn how to evaluate the sponsor/operator, the market, and the deal so you can minimize the risk of loss and protect your capital.
- 1yIan IppolitoBusiness MemberInvestor · Tampa, FL · Member since 2015 · 1k+ posts · 1k+ votes
Quote from @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.
I have a seven-figure portfolio in both active (i.e. directly owned) real estate and passive (i.e. syndication/crowdfunding) investments.
In my opinion, you don't have the time to consider owning direct real estate. You have a full-time job, new baby and studying at school.
On the other hand, I feel one of the main advantages of passive investments (via syndication/crowdfunding) is that I can hire a manager who has years more experience than I can ever hope to obtain myself. And once I finish the due diligence, my work is done: it's completely passive. Also, rather than taking a large amount of money and investing into one single directly owned property, I can split it up into much smaller chunks across many different passive investments. This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.
The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else. That means learning how to vet a manager. Not everyone has the time and ability to do that and not everyone feels comfortable turning over control. So I feel it's not a fit for everyone. Also there is a management fee to pay for all of the above. So someone who is looking purely to maximize potential return (and has unlimited time) is unlikely to find this a good fit.
A great book for newbies (and pros too), is:
Sean Cook's "Investing in Real Estate Private Equity: An Insider’s Guide to Real Estate Partnerships, Funds, Joint Ventures & Crowdfunding"
The author has sat on both sides of the table on billions of dollars of real-estate transactions. And he provides great overview of what to watch out for. And in doing so he uses charts and data to expose some of the deeply held myths (such as regarding sponsor alignment) that many people incorrect believe (and certainly appear in most pitch decks).
The Real Estate Crowdfunding Review - Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes1y
@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.
- Member since 2023 · 15 posts · 6 votes1y
Thank you so much everyone for giving me your honest advice I really appreciate it.
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