Passive Real Estate Investing Vs. Job Replacement

By in large I work with people who are interested in passive real estate investing.  To be sure I also work with real estate investors who are looking for rental property to generate enough cash flow that they can replace their income.   But honestly, that’s a lot harder than people even begin to realize.

What is Passive Real Estate Investing?
Passive real estate investing is looking for quality rental properties that are self-sufficient as far as paying for themselves, in neighborhoods that will move along or a little ahead of whatever economy we are in and will attract a large, stable tenant pool.  These rentals will generate some cash flow every month…especially with the financing requirements for real estate investors today.

The passive real estate investor is an individual that may manage these homes him/herself but is just as likely to turn the income property over to a professional property manager.  This person is well employed with enough disposable income to afford down payments for Kansas City real estate investing.

Can I Replace My Income Investing in Real Estate?
Maybe.   But not likely.  Not anytime soon, anyway.  I work with a few investors that buy lower end rental properties ($50,0o0 and below) that have an eye on “retiring” from their jobs someday.  But as time moves on they begin to discover that the bar always moves.  They use their professional incomes to finance the acquisition and rehab of these rentals and in order to gain more of these properties they need to keep their income.

One young (just turned 30) real estate investor I’ve been working with for nearly 6 years has acquired 34 doors.  A solid mix of fourplexes, duplexes and single family homes.  He generates quite the cash flow.  But in order to get to his income goals he has to manage himself on top of his professional life.  Little time is left for a girlfriend and social life.  I keep trying to get him to hire a property manager and meet a nice girl.  🙂

“It’s harder than I thought to get to $10,000 a month in rental “profits.”   Duh, it’s very hard.  But then again, a six-figure income is always hard.

real estate investing workshop = freePassive Is the Way To Go For Most Would Be Real Estate Investors
I work with professionals each and every week looking to secure a retirement, not replace their income.  Passive real estate investing in perfect for that.  You don’t have to own 20 properties.  You don’t have to chase rents.  You certainly don’t have to fix toilets.

What you do have to do is find the right rental property for your situation.  You have to hire and manage a quality property manager and you have to understand that wealth through real estate comes through the passage of time and cannot be found on some “SYSTEM” you found for only $299.95.

Passive real estate investing is conservative.  It’s boring.  It’s not something you’ll really brag about at parties.  But twenty years later, you’ll wake up and realize your retirement is so far ahead of those that didn’t do anything.

Do the math.  Prove me wrong.


Filed under Real Estate Investing

3 responses to “Passive Real Estate Investing Vs. Job Replacement

  1. Yep, pretty much. The young man of which you speak, is in far better shape than he thinks.

  2. He’s actually in fantastic shape. Hope I didn’t leave any other impression. But he works his tail off and when he’s 45 his net worth will just kill me.

  3. The path to wealth and riches is paved by hard work, determination, and a tad of luck. Obviously this young man you referred in the post will continue to invest, always looking for bigger and better. Retiring? Even if the income allowed him to do so, it sounds as though he’d continue to work.

    Good post, Chris.

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