Just say no to landlording!
Now I realize I just offended many, if not most of you. Let me explain.
Real estate investing is not for everyone. That sounds weird to say on the world’s premier website built for do-it-yourself real estate investors.
I’m in my third decade as a real estate investor and have written three books on the topic. I’ve talked to thousands of investors and learned that DIY real estate is not for everyone, or in other words, landlording. Who am I talking about?
There are many examples, but I am mainly talking to those of you who have a great career, a busy family, or are already enjoying a great retirement. Many of you will find that this wonderful “passive” investment opportunity is anything but passive.
Many doctors, dentists, IT professionals, and other highly paid professionals have found it’s just a second job. A job that doesn’t pay well and sucks the life out of them. A job far more frustrating than they ever dreamed of and a role they can’t wait to ditch. Sometimes, they do just that.
- Like the oral surgeon in the Pacific Northwest who told me he was building a portfolio of 20 rental homes. Then after a long sigh, he admitted he spends his breaks between appointments talking to painters and his evenings screening tenants. Then he surprised me when he said: “And I’m only on my third house.”
- Or the medical professional in Parkersburg, West Virginia, who successfully built a portfolio of 42 units. I was really impressed. Then he told me how a tenant who had just moved in the previous Monday had kindly waited an entire 24 hours before he set the unit on fire. He said he is going to need to spend the next six months dealing with insurance claims, claims adjustors, police depositions, and more. Plus, the tenant might get off with an insanity plea.
- Or the guy who was good at marketing and decided he should be a house flipper. Then he decided to build seven homes from the ground up. This fool didn’t even know how to tighten a doorknob on his own house, so he lost money in the process. Oh, that was me. Thankfully, that was almost two decades ago.
One time, I hadn’t heard from one of my standalone mobile home lease-to-own tenant-buyers 90 minutes away in Wytheville, Virginia, for a few months. After seven or eight years of steady payments, they went dark. I drove down there and what I found was horrifying.
To keep things clean and vague: It involved dogs, babies, and alcohol.
I had to haul this previously beautiful double-wide to the dump and sold the lot for a fraction of its previous value (4 Key Lessons Learned From Investing in Mobile Homes).
This is why I made a big move to passive investing years ago; this is all my company does now.
As I said, DIY real estate investing is not for everyone.
Does Passive Investing Resonate With You?
As I said, I imagine I have offended a lot of you. But I’m also guessing this resonates deeply with many others. If you are like me from 20 years ago, you didn’t know where to turn. Passive investing in real estate was the playground of rich insiders. It was hard for many of us to access this arena.
But passive investing is available to the masses thanks to relaxed syndication laws, the explosion of social media, and many other factors during the last decade.
But now we have a new problem.
The rising tide has lifted all boats during the last decade, and it is hard to know who to invest with. Or how.
Warren Buffett says one day, the tide will go out, and we will see who is skinny dipping.
I don’t want to invest with skinny dippers passively, and I’m guessing you don’t either. That’s probably why you’ve read this far.
How You Can Get Started In Passive Real Estate Investing
I’ve got great news!
BiggerPockets now has a video series for passive investors! This is a goldmine of information, and I strongly suggest you take advantage of it. This new course was just announced, including lots of information on passive investment. For example:
- Join Matt and Liz Faircloth as they discuss passively investing in the context of marriage and real estate partnership.
- Connect with Jay and Wendy Papasan of Keller Williams fame to learn about setting goals as a passive real estate investor.
- Gain valuable insight into real estate investing with our webinar replays.
- Access articles, virtual events, and so much more to get you moving forward in your passive commercial real estate journey.
You will get this information and much more in this course on How to Become a Passive Investor.
This course is only open to those with a BiggerPockets Pro Membership. But don’t despair if you don’t have a BiggerPockets Pro membership—you can sign up here. Plus, use the promo code: “passivepro” at checkout for 20% off your annual membership!
Once a Pro Member, you can access exclusive videos, see market trends, make worthy connections, and much more.
Getting involved with BiggerPockets six years ago was perhaps the best decision I made in 29 years as an entrepreneur. Getting involved with BiggerPockets as a Pro member was the next level, and I recommend you take the leap today.
Let us know in the comments below if you’re getting into passive investing or if you’re already knee-deep in it!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.