I am planning to move to a developing country in 10-15 years to pursue a passion of mine in the medical field. However, I would like to make 200K/yr in passive income by the time I move abroad to be financially secure for my family. Is it a realistic goal? If yes, What type real estate is best: Residential real estate (single families + small MultiF) vs Commercial Real estate vs Self storage? Which one will provide the most cash flow and require the least amount oversight?
All Advice would be greatly appreciated. Thank you!
@Jonathan E Francois It can be done, but remember to continually redeploy your capital consistently to increase the velocity of your money. Think of syndication like you would a brrr. You place your capital, earn cash flow, get the tax write-offs, but when the syndicator refinances or sells, get your return of capital and reinvest it (do it again). This redeployment allows you to multiply your investments, and therefore your income streams. Some use a strategy to spend the cash flow but reinvest 75% of their returned capital and profits, and they then add the remaining 25% to their cash flow. This way, you are padding your income streams by 25%, and then you can see that you can truly live off the passive income while building equity (and wealth) with your redeployed capital and profits. Hopefully, that makes sense. Always available to discuss.
I think it's very doable with passive real estate syndications investing in assets like multifamily, self storage, mobile home parks, NNN leases and more. I started out with single and multifamily "passive" investing and it was anything but passive. It was a constant struggle managing the property managers and dealing with all of the issues that come up with that type of investing - even the turnkey model was not passive in my experience.
I am now a full time passive investor in real estate syndications. The active part is screening the operator and evaluating the market, asset class and the deal - but after you wire your money, the rest is passively waiting for the operator to execute their strategy. The sooner you get started, the sooner you can start building wealth that will snowball as your distributions come in and you have deals go full cycle.
@Jonathan E Francois It can be done, but remember to continually redeploy your capital consistently to increase the velocity of your money. Think of syndication like you would a brrr. You place your capital, earn cash flow, get the tax write-offs, but when the syndicator refinances or sells, get your return of capital and reinvest it (do it again). This redeployment allows you to multiply your investments, and therefore your income streams. Some use a strategy to spend the cash flow but reinvest 75% of their returned capital and profits, and they then add the remaining 25% to their cash flow. This way, you are padding your income streams by 25%, and then you can see that you can truly live off the passive income while building equity (and wealth) with your redeployed capital and profits. Hopefully, that makes sense. Always available to discuss.
Thank you @Jim Pfeifer and @Rick Martin! This is very helpful and valuable information. I am not well versed with syndications. Where can I learn more about this type of REI? How did you start investing in Syndications?
There are a lot of posts about syndication investing in these forums. I first learned about passive investing in syndications through podcasts and books. Some good podcasts geared toward passive investors include: Passive Wealth Strategies for Busy Professionals, Real Estate Syndication Show, Real Estate Guys Radio, Passive Investing from Left Field, Wealth Formula Podcast, and Capital Hacking. Here are some informative books on the topic: The Hands-Off Investor (Brian Burke) and Passive Investing in Commerical Real Estate (James Kandasamy).
Like others have pointed out, investing in syndications could be a good option. That will allow you to be truly passive. If you decide to buy on your own deals and use a property manager, you will still have to be involved in some of the operations. Where syndications there is nothing you have to do. If we assume a 10% Cash on Cash return, which is pretty common, you would have to invest $2,000,000 in order to receive $200,000/year in cash flow.
@Jonathan E Francois It can be done, but remember to continually redeploy your capital consistently to increase the velocity of your money. Think of syndication like you would a brrr. You place your capital, earn cash flow, get the tax write-offs, but when the syndicator refinances or sells, get your return of capital and reinvest it (do it again). This redeployment allows you to multiply your investments, and therefore your income streams. Some use a strategy to spend the cash flow but reinvest 75% of their returned capital and profits, and they then add the remaining 25% to their cash flow. This way, you are padding your income streams by 25%, and then you can see that you can truly live off the passive income while building equity (and wealth) with your redeployed capital and profits. Hopefully, that makes sense. Always available to discuss.
@Jonathan E Francois It can be done, but remember to continually redeploy your capital consistently to increase the velocity of your money. Think of syndication like you would a brrr. You place your capital, earn cash flow, get the tax write-offs, but when the syndicator refinances or sells, get your return of capital and reinvest it (do it again). This redeployment allows you to multiply your investments, and therefore your income streams. Some use a strategy to spend the cash flow but reinvest 75% of their returned capital and profits, and they then add the remaining 25% to their cash flow. This way, you are padding your income streams by 25%, and then you can see that you can truly live off the passive income while building equity (and wealth) with your redeployed capital and profits. Hopefully, that makes sense. Always available to discuss.
Except finding a quality syndication that can survive a conservative vetting process is rarer than hell, especially if your pool of options is public platforms.
Like others have pointed out, investing in syndications could be a good option. That will allow you to be truly passive. If you decide to buy on your own deals and use a property manager, you will still have to be involved in some of the operations. Where syndications there is nothing you have to do. If we assume a 10% Cash on Cash return, which is pretty common, you would have to invest $2,000,000 in order to receive $200,000/year in cash flow.
If only it were that easy. You can't "assume" a return. Syndications fail all the time. There may be people who think they are masters at vetting syndication's and have enough pull to form a cabal and force their will on the sponsors if things go awry, but that doesn't apply the OP, evidenced by the questions he is asking.
If 10% from syndications was assumable and accessible to the rest of us unconnected non-professionals, we'd all have a real hard time justifying 80% of whats in the rest of our portfolios. I can't get an "assumable" 10% on anything, in any asset class right now. Aiming for double digit returns in these markets today requires some pretty serious speculation. Yet syndications are somehow just sitting right there in plain sight, offering a safe and easy 10%? No.
Thank you @Jim Pfeifer and @Rick Martin! This is very helpful and valuable information. I am not well versed with syndications. Where can I learn more about this type of REI? How did you start investing in Syndications?
Start with looking up what an accredited investor is. Being one never automatically imparted me with the knowledge and expertise necessary to properly dissect a sponsor or his plan, let alone influence him along the way. Sure doesn't stop them from wanting to take my money though
As others have said, if you want things truly passive, you want to go the syndication route with CAREFULLY screened syndications. I'm in the vetting proces right now with some. It's actually comical in that some that I reached out to also happen to have "guru educational" programs......and when I inquired about simply participating in the syndication as a limited partner I never heard back from them about it.....but I certainly started getting spammed about their guru educational programs. To me, that is actually part of the screening process anyway :-)
@Account Closed I was using a rough number of 10% to demonstrate the thought process. That being said, a 10% Average Cash on Cash return is a reasonable assumption. Not sure how many syndications you have actually seen and participated in..