What makes passive investing great?

The goal of passive investing is to build wealth over time. Passive investing is great for people who want to invest in real estate but don’t have the time to actively be involved in finding, organizing, securing, and managing properties.

Passive investing is an investment strategy where you provide your capital with a general partner to invest in the purchase of an asset. You are providing a portion of the funds for the deal; you are a crucial part of this business. However, you are not actively involved in organizing the deal, the general partners will be finding the properties, securing financing for the properties, and managing the properties until they are sold, and then the process can start again…. And that’s why it is called passive investing.

Financial freedom gives you the freedom to pursue your passions, spend more time with your family, and help others in your community. Financial freedom is achieved when your passive income outpaces living expenses. Financial freedom allows you to take control of your finances and being in control of your finances is a great stress reliever. Passive investing is an economic engine for you and your loved ones.

Here are some reasons passive investing is great:

Tax Benefits: Investors can benefit from legal tax deferment & avoidance methods through the U.S. tax code such as the 1031 Exchange, pass through deductions, depreciation in the property value due to normal wear and tear, cost segregation, and tax-free cash-out refinances.

Hands Off: After you have performed due diligence on the sponsor, it is now time to be an equity stakeholder. Your primary role is the financial contribution in the investment. As an equity stakeholder in a real estate venture, you start collecting a portion of that venture’s wealth and make money while you sleep.

Capital Preservation: This is the number one priority of our team. The core of everything we do is always making sure we protect investor money. Along with annual preferred returns, capital preservation is returned during one of the multiple exit strategies the team has in place.

Knowledge: This is a great opportunity to learn about real estate syndications and benefit from the deep education of the sponsor and the team. Communication and transparency is important, please ask questions. The GP team should be available via phone or email to answer any questions or concerns.

There is also a downside of passive investing for some people, risk means something different to everyone. It is always important to know how the real estate business works. When you’re preparing to passively invest in a real estate syndication, one of the first things you need to make sure to do, before you ever look at a single investment opportunity, is to reflect on your own personal real estate investing goals. Make sure to evaluate the integrity and experience of the GP team and ensure the investment strategy aligns with your financial goals. Fully understand both the opportunities and risk associated with the specific investment and learn more about the market where the investment is located. Please, take the time to really analyze and discuss the benefits and risks of the deal with the general partner before moving forward with any decision.

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