Passive Investing Guide??

Question

Hey guys,

I was wondering if there is a passive investing guide out there for rentals. I have not found a solid guide on BP on how to invest passively if you simply cannot make weekly or monthly trips to rentals unless in times of extreme emergencies. A few reasons might be:

1. personal preference. 
2. Job requires frequent travel
3. Job requires 70-90 hrs/week

What are the most important steps to passive investing? Selecting a property management company that tries to keep costs down? A friendly realtor to lease your house when there is turn over?

Mark Podolsky · Answer

If you like the idea of passive income without any tenants, termites or toilets breaking in the  middle of the night, then you should think about investing in raw land.  With raw land of there are no maintenance headaches  and the pressure to keep the tenant happy.   Plus, there is less capital involved  with structuring land deals. What I like to do is acquire 5 - 40 acre parcels from a distressed owner, sell that property on a land contract and a promissory note and collect the monthly payments. In this way, I have monthly passive income, plus I don’t have to incur the expense of foreclosure should my owner fail to make their payments. Simply rinse and repeat.

Joseph Bramante · Answer

Your title says "passive" but all of your questions seem to be related to "active" investing. While true passive investing does require some work on the front end when vetting sponsors and deals, that should be it.

Joel Owens · Answer

"I am aware that if the property is above 60-70 units, it can be automated with a hired property manager for cheap."

Size is only one component.How old it is,how hard it is to rent,how good or bad the area is,landlord utilities included or not,type of tenant base,whether the building is full or paying,half full,or vacant with rehab will all determine how intensive an apartment building will be to lease up,stabilize,and  manage and the price given.

It is simply easier to talk with you over the phone or you can e-mail me.

Thanks

J Scott · Answer

I would actually want someone I had a relationship with and someone who didn't have a vested interest in any part of the investment (for example, the handyman will have a conflict of interest, as he gets paid every times there would be an issue).

Personally, I'd find a family member, friend or someone else that you have a pre-existing relationship with, hire them as an employee or independent contractor and pay them to essentially take ownership of the property (in a metaphorical sense).

Jack Lee · Answer

J  Scott Who would this person be? Would a local handyman you have a relationship with count?

Joel Owens Under 100k. What are the options? What if it is over 100k? I am aware that if the property is above 60-70 units, it can be automated with a hired property manager for cheap.

Joel Owens · Answer

Jack I have many clients such as yourself I work with.

The first question is "How much money do you have to invest?"

Second question is  "How much of an annual return do you want to get on this passive investment??"

Triple Net investing is real passive and you just collect the checks and it is what many of my clients like to purchase along with apartment buildings but with those you have to be a little more hand on.

Each asset class and investment strategy requires a different amount of capital requirement and finance structure.For this reason this is why contacting my by e-mail or phone is best.

If you have under 100k cash your options are more limited than with 100k or above.

Jared Orme · Answer

Another option is to be or be a part of a CPL. That is a private lender to rehabers. Sometimes called hard money lenders. You basically loan them money for a 5%-8% return over 1-2 years. They then source the rehabbers to loan the money to.

or

You can directly loan small amounts of money to project based real estate developers (like my investment group). It is kinda like prosperity.com or lendingclub.com but with professionals and experts instead of the random bloke. These programs pay out quarterly to you directly 10-20%. You make a good bit more by cutting out the hard money lender, which is the middle man.

These are all private loans and earn great, reliable income without the risk being the rehabber, the work or the need for a team.

J Scott · Answer

If you want rentals to be completely passive, here is what you do:

1.  Hire someone you trust implicitly to take care of everything for you.

2.  Pay them very well.

You don't want to leave a property management company in charge of your rentals.

Passive Investing Guide??

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