How Should I Approach Real Estate?
Broadly speaking, there are two kinds of investors - the active investor and the passive investor.
An active investor is looking to take part in purchasing, renovating, marketing, and maintaining a property. This can mean anything from slapping on new paint, to tearing down whore structures and starting over. It goes wothout saying that not every investor is looking to do that kind of work. That is where the passive investors find their place in the market.
The opportunity for the passive investor is to partner with the active investor that is renovating the property. Because the lending market is tight right now, many companies struggle to acquire the funding required to purchase and fix up real estate. The passive investor steps in to fill the void and profits on the loan without becoming involved in day-to-day operations. The loans are called first trust deed investments and are immensely secure because they are guaranteed by the property itself. Lenders stand to benefit from monthly interest payments on the loan as well as final payments at the end of the lifetime of the loan. The life of these investments can range from as little as six months to over years.
There is an even more hands off way to invest in real estate for those who are seeking to make a longer term investment. Established real estate companies, called syndicators, will partner with private investors to buy and hold properties for as long as five years. Investing with a syndicator does two important things - it removes the necessity to personally search for a fixer upper investment opportunity, and it mitigates risk by partnering you with a professional real estate firm. As a partial owner in an investment like this, you are entitled to a share of profits that is generated from the rent as well as share in the profits earned when the property is sold.
There are other investments that give you the freedom of not having to be hands on all the time. Sign up to receive our Passive Investment Guide and learn more about Corporate Notes Investment.