SHOULD I INVEST ACTIVELY OR PASSIVELY IN REAL ESTATE

TRANSCRIPT:

Whether you should invest actively in real estate or passively in real estate has a lot to do with how much money you have on hand and how much time you have on your hands.

There are ways to get into real estate on the active side that require almost no money, such as wholesaling or flipping using other people's money, meaning you're getting hard money loans to do it.

So if you don't have a lot of money on on hand, but you have a lot of time because that requires a lot of time, then active investing in that form is a way to go.

Now, some people do that to generate the money to get into passive investing, because in passive investing you have a professional team that's going to buy a larger asset.

So you usually get the benefit of scale and therefore really good returns.

But passive investing does take money up front.

Most invest most passive investments start about 50 to $100,000. There are few that you might be able to get in at 25 or something like that, but you're going to need some money up front to start with.

But once you're in those, you don't have to do anything.

Have a professional time that's doing it.

So it's really great for people that don't have a lot of time on their hands.

Now, you may have some money sitting around that you don't even realize.

You may have money in stock accounts that's not performing well that you could use to get started in passive investing.

You may have money in a retirement account that you can access.

You may have equity in your home that you could pull out to start investing, but be careful with that.

If you're taking a loan against your house right now, interest rates are on the rise.

You want to make sure that the investment you get into pays more.

Then you're paying to borrow that money.

So those are a few options, but basically comes down to time and money.