#141 5 Ways That You Can Invest in Real Estate Without Being A Landlord
Do you want to invest in real estate but don’t feel you have the time or capacity to become an active investor and be a landlord?
Actively investing and being a landlord is only for some. That is one of the reasons that Dr. Peter Kim has chosen to pursue passive real estate investing; it has provided him with the best return on his time.
While active investing in real estate has proven to provide a steady stream of passive income, it is not the only way to invest. In this episode, Dr. Kim will share with the listener five ways that you can invest in real estate without being a landlord.
To learn more about our Leverage & Growth Summit which is happening this spring, CLICK HERE.
Episode Highlights
Now, let’s look at what we discussed in this episode:
- 5 Ways That You Can Invest in Real Estate
- A real estate syndicate is an alliance formed when several investors combine their funds to make one investment.
- Due diligence is “an inquiry, audit, or review undertaken to validate facts or details of a matter under consideration.”
Episode Breakdown
Why don’t more people invest in passive real estate opportunities? Number one, they don’t know what’s available. And number two, they don’t know how to do the proper due diligence, underwriting or decide what type of investment might work out for them.
Investing in a syndication is investing in an opportunity. Syndication is when people get together and pool their resources. Collectively, a sponsor will invest in a large opportunity, such as a 350-door apartment. And you become a limited partner, not required to make the daily decisions as the landlord. By leveraging your capital in someone else, they will provide upgrades and renovations and fill it with renters. After a few years, the sponsor will sell and make a profit. And all you have to do is… wait for the scheduled distribution and a large payout at the end.
Another way to invest passively in real estate is through real estate funds. As syndications represent one investment, a real estate fund represents multiple properties when supported through a sponsor—providing instant diversification for your portfolio.
Passive investing also includes REITs, real estate investment trusts. REITs are companies that hold, operate, and manage real estate. Profit is eventually created when the property is sold. REITs can be publicly traded on the stock market or purchased privately.
To be clear, what makes it different from syndications and real estate funds is that you don’t own the properties directly. You actually own a share in the property.
Another way to invest passively is by owning notes or note investing. Notes are created whenever there’s a debt placed on a property in the form of a mortgage or any other type of loan. You don’t actually own the property, but the loan on the property. Essentially, you are acting as the bank.
Dr. Will Kirby, describes that the role of doctors is ultimately education, and through that process you become an authority in your specialization.
And lastly, passive investors look for hard money loans. Hard money loans are also called Bridge loans, short-term loans used to fix & flip homes. Many house flippers use private lenders, who have capital and look for opportunities to invest in debt and get good returns.
We talk in depth about all of this and more in our course–Passive Real Estate Academy. Want to learn everything about investing in real estate with confidence? You can grab your seat right here! 
Anders Ericcson refers to the 10,000 hour rule. Malcolm Gladwell quotes Anders and says that if you do something for 10,000 hours that makes you an expert. Actually, it is over that 10,000 hour period that Anders says to become an expert it requires purposeful practice, effort, and feedback from experts.
Having purposeful practice is required to become the spokesperson of your specialty, your brand. It takes one being open and honest for feedback to hone the skills and voice you need to establish your brand.
Anders Eriksson, in the book PEAK, refers to the mindset that there is no such thing as a protégé. The best in the world became who they are because of purposeful practice. You can become an expert by putting in the hard work and educating yourself.
