Do you want to invest in real estate but want to avoid all the hassle of landlords, financing, renovations, renters, permits, inspectors, direct mail campaigns, and other aspects of the real estate investing side business?
me too. I have owned dozens of single-family rental properties. today, I only invest passively in real estate.
Passive Real Estate Investing These include bonds, funds, real estate syndications and real estate crowdfunding investments. none teeth Intrinsically better or worse than something else, Or rather than aggressive real estate investing. Included There are various advantages and disadvantages.
But they also have their pitfalls. Many don’t allow Non-Accredited InvestorsPaternalistic Uncle Sam doesn’t believe it’s his responsibility to give ordinary people access to certain things. Types Investments. As a result, people with a net worth of less than $1 million (excluding home equity) or annual income of less than $200,000 cannot invest in many passive real estate investments classified by the SEC as 506(c) investments.
Some passive investments classified as 506(b) include: do Allow non-accredited investors. These also have pitfallsbutThe government won’t give them permission. To be promoted publicly.
So how do you find passive investing if you can’t advertise?
Crowdfunding: An easy start
Several Real Estate Crowdfunding Platform We allow non-accredited investors, and I have personally invested in most of the largest companies.
These vary based on quality, past revenue, and reputation. I’ve had good experiences with Groundfloor, Ark7, and Arrived. Fundrise has had a tough few years but seems to be recovering. Same for Streitwise.
Most of these can be tried for between $10 and $100. beginning When you start investing passively in real estate, EasierThat’s far more comfortable than the $50,000 to $100,000 sometimes required for private equity investments.
Interestingly, some real estate syndicators are beginning to consider using crowdfunding regulatory filings with the SEC instead of traditional 506(b) or 506(c) filings. Good Egg InvestmentsIt is registered under Reg-CF and is open to non-accredited investors. so far I like them, Find Founder Annie Dickerson To be It is reliable and transparent.
Ask other passive investors
Start with people you know in real life, like friends and family. wonderful scaffold the world of If you weren’t doing passive real estate investing, you probably wouldn’t be reading this article right now.
There are plenty of other options How to find You can start with reputable real estate sponsors (syndicators), bond issuers, fund managers, etc. of forum Real estate websites like BiggerPockets and Facebook groups for passive real estate investors.
There is also a platform Specially Dedicated They are called passive real estate investors. Left Field Investor,this is wonderful A forum for discussing sponsorships.
Join the Passive Real Estate Investing Club
There aren’t many, but There is Several investment clubs Specialize In passive real estate investing.
“Left Field Investors” is one of them. My company, SparkRental, It is called You might also want to check out our Co-Investment Club. Alternative Investment Club As a third option, you can name a competitor., Because I know and respect them and their founders. Each of these three clubs operates in a different way.with different emphasis.
At Co-Investing Club, we value accessibility. confirm Everyone has access to passive investing, even those who don’t have a ton of money. monthly Jointly review new transactions from various syndicators and bond issuers.
Left Field Investors and Alternative Investing Club primarily serve accredited investors. All three clubs Focus on bringing in more Guest Speakers and Transparency in Having a platform where passive investors can share information about sponsors, transactions and risk factors.
Listen to the Passive Real Estate Podcast
Some real estate podcasts feature syndicators frequently.
BiggerPockets is not just one Some podcastsoften features real estate sponsors. Hosted by Marco Santarelli Passive Real Estate Investing PodcastGoodegg hosts The Life and Money Show, Left Field Investors hosts the Passive Investing from Left Field podcast, and SparkRental hosts the Live Off Rents podcast, a collection of short episodes ranging from 5 to 20 minutes.
These are all great ways to find new sponsors and hear about their unique investment strategies.
Networking with active investors
You can also invest directly with active investors in the field. Perhaps they Reselling a housebuy and hold wholesale properties, or rental properties. Anyone can make it for Great Partner Invest Passively.
it is Format You can either enter into a deal with them as an equity partner with partial ownership, or you can loan them money as a private note.
But a word of advice: only invest with experienced investors. Who Something you know, love and trust. Your cousin buying their first or second property One safety Man Invest. Find investors who have done dozens or hundreds of deals Their ExperienceThey are happy to open their books and show us their track record, including the good, the bad and the ugly.
What is hard for non-accredited investors to find?
Some Passive Real Estate Investments To give permission Non-accredited investors are relatively easy to find. Value Added Multifamily Real Estate Syndication What comes to mind is The most common.
Others are more Harder To find out. For example, networking with active individual investors requires some effort. On your sideJump into the BiggerPockets forum and see who’s great Single Family “An investor who wants my money?” and You will receive thousands of responses, but let me pick out a few: Really Transparent, trustworthy and experienced investors a lot Harder.
In syndication, It’s hard to find niche investments that allow non-accredited investors to participate. Only two reputable self-storage sponsors come to mind. To give permission Non-accredited investors. The same goes for mobile home park investors. I can think of only one industrial real estate syndicator that accepts non-accredited investors. literally My job is to network with sponsors and find the most experienced and trustworthy sponsors.
It’s hard to find A private equity real estate fund that is open to non-accredited investors. Two well-regarded ones come to mind right away.
Where to start
if you want to Soak your feet in waterConsider investing $100 in Groundfloor, Ark7, or Arrived.
The next level is researching notes and syndications. Consider joining the Passive Real Estate Investing Club Benefit from the experience of other members.
When the Co-Investment Club meets to vet a deal, members ask sharp questions to explore potential risks. Together, we analyze risk from multiple angles. If members like the deal, they can choose to invest $5,000. And together, we go beyond the $50,000 minimum investment to $100,000.
If you can improve your risk analysis by myselfStart networking with private investors who could be good partners. It is we We ourselves have already made every possible mistake and strive to find specialized single-family investors who will not lose money when partnering with us on a portfolio of resale and rental properties.
For me, it’s a fun, low-stress way to invest. Travel the world There’s no hassle with tenants or property managers. And I can invest in small amounts across many properties, cities, syndicators, private investors and property types. That means I don’t need a crystal ball to find the next hot trend or booming city – the money’s probably already there.
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BiggerPockets notes: These are opinions expressed by the author and do not necessarily represent the opinions of BiggerPockets.
