Passive Investments Enabled Me To Quit My Job Last Week

50 Replies

I began investing in syndications as a multifamily limited partner around 5 years ago, and the passive income that I'm making is enough that I was able to quit my job last week.  I'm 56 years old, and I was an accredited investor for many years but didn't even know what that was, and I didn't know that real estate syndications even existed.  I moved some money out of the stock market, and over the years, redeployed those dollars as an LP.  My income from those deals has now enabled me live comfortably and help others do what I've done. I'm absolutely here to tell you that you can passively invest, do no work and take very reasonable risk, and easily have a six-figure tax-deferred income.  

My daughter has 4 years left in high school, and I'm really too young to retire, so I'm going to focus on building my personal brand, sharing my story, and helping others do what I did. Passive real estate investing changed my life, and the best part is that it requires no work and I could do it while I was still employed. I had done SFR and multiplexes, but I've found nothing so far that beats passive investing for safety and returns. It's truly the best way to learn this business and invest while holding down a full time job.

Anyway, many of you here on Biggerpockets have played a role in me getting here, and I'm super grateful for all.  You've taught me a lot.  Now I hope that I can pay it forward by helping others do the same.

@Holly Williams Congratulations on meeting your goal!

Since you were an accredited investor 5 years ago and you mentioned a Stock portfolio, What portion of your overall retirement portfolio is allocated to RE Syndication?

For me its 13% of my overall portfolio is allocated to Syndication for me to get to my six-figure retirement.

401K  - 19%

Individual Stocks - 1% (Only counting the Dividends for distribution) 

Pension from job - 31%

SS - 25%

Individual REI portfolio - 11%

RE Syndication - 13%

I have a ways to go before retirement but I'm on target to hit all the goals. If Social Security goes away I still hit six-figures it's just the low six-figures instead of mid-six

The only thing I haven't solidified in my projections are the continued reinvestment of funds allocated to Syndications, that will still require me to do some work in the form of research, vetting, etc..

    

That's a good question. Right now I'm still in 60-75% stocks. I have to get out of them gradually because of capital gains taxes. It really is a scam...the stock market. But I feel like I have to be in it, but I've moved a lot of my 401K over into a checkbook IRA and invest through it, and am also just getting into hard money lending with it.

Get on my mailing list, and I'll share with you the actual numbers from a couple of my deals that have gone full circle.  Cash flow, capital appreciation, tax deferments, and equity growth.  It's absolutely incredible.

Originally posted by @Holly Williams :

That's a good question. Right now I'm still in 60-75% stocks. I have to get out of them gradually because of capital gains taxes. It really is a scam...the stock market. But I feel like I have to be in it, but I've moved a lot of my 401K over into a checkbook IRA and invest through it, and am also just getting into hard money lending with it.

Get on my mailing list, and I'll share with you the actual numbers from a couple of my deals that have gone full circle.  Cash flow, capital appreciation, tax deferments, and equity growth.  It's absolutely incredible.

Holly, first of all congrats on quitting your job! Second of all you should try to have a discussion with a CPA like @Brandon Hall about opportunity zones. I see you are only an LP investor, so you may not have as much say in a deal, but this new law may be a partial solution to your problem of getting your funds out of the stock market.

Opportunity funds allow you to take money out of the stock market without capital gains taxes and reinvest the gains in certain locations 'zones'. Like I said speak to a CPA, as this is not my area of expertise.

@Holly Williams

Congrats on quitting your job and reaching your goals.

Did you start your journey in REI w Syndication as a Limited Partner or did you start by purchasing SFH or small Multis?

@Yonah Weiss Yes, I’ve spoken to Brandon, and you are correct. I’ve been looking into it, and want to learn as much as I can.
@Raul R. I had done a couple of SFH, but mostly I’ve spent most of my time the last 30 years working in an industry that I loved. ( except for the last couple of years, lol)
Congrats ! That is great you have been able to retire off your passive investments Have you had any deals that didn’t meet the projected roi or do you find that most syndicators are pretty conservative with numbers and under promise and over deliver ? How much time do you usually spend on due diligence per syndicator ? Have you mostly found the syndicators you work with on BP? Or have you ever used sites like crowdstreet or other platforms ?

Now this is a story I would like to hear on the podcast. Very unique path to financial freedom that I think a lot of people will get something out of. Congrats @Holly Williams

@Joseph M.

It's all about the team, the market, and then the deal itself.  I've actually written a little booklet on what I look for and how I evaluate a deal.  PM me and I will send to you.  I've done some of the crowdfunding stuff via my SDIRA. As far as due diligence, that all depends, but I can usually tell in about 15 minutes if someone knows what they are doing.

Congrats on reaching your goal. How much cash did you start with 5 years ago? 

You mentioned being accredited so I'm assuming you had some decent capital to get going. 

Oh, and @Joseph M.  Yes...there have been many that haven't met my criteria.  I want the projections to reflect the bottom of the market almost.  I spend my time with those that under promise, and I've learned that you have to look at many, many data points...all of them together.  I also want to work with people who have their own personal money in the deals.  Everyone should have skin in the game.

@Brian Garrett Not necessarily. If you live in NYC in anything but a third-floor walkup with roommates and you are over 30, chances are you are an accredited investor. I used my IRA at first.

Originally posted by @Holly Williams :

@Brian Garrett Not necessarily. If you live in NYC in anything but a third-floor walkup with roommates and you are over 30, chances are you are an accredited investor. I used my IRA at first.

I understand but do you mind sharing the amount of starting capital?

Feel free to message privately if you don't want to share publicly thanks.

@Holly Williams I could see it not being too rare in NYC especially for the $300,000 combined income of married , a $150k per spouse . I’ve heard to rent an apartment most landlords there have a rule one must make 40x monthly income .

Congratulations Holly! Very inspiring! The rush of emotions from quitting a job is like nothing else

Love it! Congratulations @Holly Williams . I wish this avenue was talked about more. My wife and I started with basic rentals, then with flipping, then buying larger multi-unit deals, because that's what you're "supposed to do," right? Then we finally realized we could have been much further ahead with much less risk and hassle investing passively. Now that's all I focus on and it makes life much happier. I put my own money in deals and work with a few syndicators doing various tasks, including helping them raise capital for their deals. Much better than dealing with contractors, tenants, and maintenance issues!

Originally posted by @Brian Garrett :
Originally posted by @Holly Williams:

@Brian Garrett Not necessarily. If you live in NYC in anything but a third-floor walkup with roommates and you are over 30, chances are you are an accredited investor. I used my IRA at first.

I understand but do you mind sharing the amount of starting capital?

Feel free to message privately if you don't want to share publicly thanks.

 an accredited investor is an IRS definition

you need to either have $1 million in assets outside your primary residence (includes retirement) or annual income over $200k or $300k jointly

https://www.investopedia.com/terms/a/accreditedinvestor.asp

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