Have you ever felt like you should expose yourself to passive real estate investments?
There is no question in my mind that everyone should have some exposure to passive real estate investments. Passive real estate investments can certainly aid you with your financial future and with your financial freedom.
Real estate investing has become a primary discussion point related to diversified portfolios. Regardless of whether you decide to invest directly in properties or indirectly through passive real estate investment vehicles, I strongly suggest that everybody has exposure to real estate investments.
Passive real estate investments can be the best vehicles for passive investors for a number of reasons. Often times, people do not want to manage properties on a day-to-day basis. Also, there are many people who do not want to have to deal with all of the headaches related to tenant issues or maintenance issues related to operating real estate.
As such, it makes a lot of sense to invest with sponsors and with other individuals who are professional real estate investors. But once you make a decision that you are going to be a passive real estate investor, it is good to know that there are a variety of ways that you can invest.
One way that you can expose yourself to real estate is through education. You can read books, as there are a number of books where you can learn about passive real estate investing. Through books, you can learn about real estate investments, you can learn about finance, and you can learn about residential and commercial real estate. Another way that you can expose yourself to real estate through education is by attending events both online and in person.
A second way that you can expose yourself to passive real estate investments is through friends and family. I have found that most people know someone or know someone who knows someone who is invested in real estate. You can talk to those friends and family members, whether it’s a parent, a sibling, an aunt or an uncle, a colleague, or even an ex-colleague about real estate. There are a lot of people involved in the real estate business. You can ask their advice about real estate investing. You can ask whether they may know anybody that you can speak with. You can ask whether they know any sponsors that accept friends and family investors into their transactions to expose yourself to real estate or real estate investment companies. Some of the larger companies may only take institutional capital, some of them may only allow ultra high net worth investors to invest with them, and some companies may only accept high net worth investors while many companies are willing to accept “friends and family” investors that the companies get to know over some time period.
A third way to expose yourself to real estate investment opportunities and real estate investment firms is through real estate crowdfunding platforms. Real estate crowdfunding is an interesting vehicle because the platforms give you exposure to Sponsors and deals. The one downside is that you have to be an accredited investor if you want to invest through the majority of these platforms. For those who are just starting out and who may not be high net worth investors, real estate crowdfunding platforms are going to be more of an educational tool for you because you do have to prove that you are an accredited investor. Being an accredited investor means that you either you have a $1,000,000 net worth or more excluding your primary residence, or that you earn $200,000 per year if you are single or $300,000 per year or more with your spouse. The sponsors on real estate crowdfunding deals require that you be an accredited investor, so if you are an accredited investor, it’s a very interesting tool to get exposure to some very strong sponsors in good markets with asset types that may be within your investment thesis. If you’re just starting out and you’re not an accredited investor, you will really need to focus your energies on meeting sponsors who will accept friends and family investors.
A fourth way that you can get exposed to passive real estate investments are through wealth clubs. Wealth clubs are groups of like minded people who promote their own deals and the deals of members to the larger group. Often times, there is a level of education with these wealth clubs where the group provides ideas, strategies and investment opportunities to members so that you can educate yourself on real estate as a whole. And when there is an investment opportunity, you can also get access to the materials to determine whether that is a deal that you would be inclined to invest in. The wealth club should provide different ideas and strategies of various types of passive real estate investments that you could make.
Until next time, let’s continue growing our passive cash flow and net worth together!