Have you ever thought to yourself that you should invest in real estate because it’s a great way to get positive cash flow and acquire additional equity? There are so many people out there that know this is important, and know it will help financially, but continue to let time slip by. Does this sound like you?
Or, are you a hustler, and constantly working to figure out creative ways to buy and manage real estate, but maybe money is tight? Do you have the money, but are too busy to stay ahead with the real estate market and what you should invest in? These are common reasons as to why people hold back when investing in real estate. It is beneficial to honestly figure out where you stand so you can self reflect about how to overcome your obstacles and start creating wealth for you and your family.
Active Investing
Active investing is when an investor looks for, acquires, closes on, and raises the capital to make a real estate transaction possible. Active investors are the ones who bring everything together from nothing. Active investors have the hustle to get a real estate deal underway. This is a great way to make money because you are pulling deals together and managing them yourself. The active investor makes the decision to buy, hold or sell. Investors can make money on his or her own terms because it’s up to them to put the deal together. If you do not have the time to actively invest, then passively investing is a better option for you. When you are an active investor, you have to dedicate a lot of time looking for deals that will give positive preferred returns, and dedicate a lot of time keeping your investors in the loop about EVERYTHING that is going on with your deal; you want to make sure the deal is transparent to the passive investors.
Passive Investing
Passive investing is when an investor knows the benefits of investing in real estate, but does not have much time to spend on finding and acquiring properties. Many passive investors say that passively investing is the BEST way to invest because the passive investor doesn’t have to do anything; other than provide the capital and sit back and collect preferred rates. It may seem a little scary to invest your money with an active investor at first, but it is such a great way to learn about investing from someone who is good at it. Typically, the active investor is very transparent as to what he/she will be investing in, and how your preferred returns will be met. Active investors also typically will have quarterly updates, and send monthly newsletters about the property and updates on what your money is doing. Often times, passive investors make an 8% annual preferred return, and at the sale of the property, the return could be somewhere upward of 20%. That is why passive investing can be so intriguing!
So, what is right for you? Do you have the drive and time to be an active investor, or are you busy with other things and want to make money on the passive end?
Creating opportunities for financial freedom 