Today’s great question about becoming a passive investor comes from Dr. Sandra C.
I have watched and listened to several videos… and read several of your emails about the opportunity to invest cash in real estate as a passive investor. I would like to know how to become a passive investor, instead of someone who has to go and learn everything that there is about real estate.
Thank you for writing in and supporting my content, Dr. Sandra.
It sounds like you’re really committed to the real estate game, and you should be proud of yourself.
I applaud your commitment to becoming a passive investor.
Before I continue, let’s define what active and passive investing means when it comes to multifamily real estate.
An ACTIVE investor is someone who has to play an ACTIVE role in the investment, such as procuring property managers, obtaining financing, or hiring renovation contractors.
In a syndication, this usually refers to the General Partner (GP).
The GP is the person who finds, closes, manages, and sells the deal AND is fully liable for the investment.
There can be more than one General Partner.
PASSIVE investors are known as Limited Partners (LPs) on the deal.
LPs or passive investors are typically only liable for the amount they invest, and they play a passive role in the deal.
These partnerships and syndications are how active and passive investors can leverage one another’s resources to do big deals.
Since any type of investing involves great risk, I would always make sure to do my own due diligence and research before investing.
As such, whether I’m an active or passive investor, it is still my duty to learn as much as I can about real estate… and to be responsible for my own financial situation. *See full disclaimer below.
I want to know simply how to plug into a group of like-minded investors who can potentially earn a regular income from a lump sum investment. I am keen to invest a little cash into something that could slowly increase my earnings while I learn and get to understand the formulas you talked about in your Real Estate program.
Dr. Sandra, I think you’ve got an awesome mindset here.
You demonstrate great patience and eagerness to learn, while still thinking big and long-term.
That’s a great start.
If I were starting over, here’s how I might go about passively investing, while gradually increasing my knowledge of real estate:
(1) I would outline my real estate investment goals and timeline for achieving those goals.
(2) I would study the basics of real estate, through books, YouTube videos, and articles like this one. I would also go a step further and take courses to deepen my knowledge.
(2) I would attend networking events, both online and in-person, to find GPs who are looking for passive investors. I would ask lots of questions and make sure I feel comfortable working with them.
*NOTE: It’s important to form a relationship with them FIRST in order to potentially qualify as an investor on their deals. See full disclaimer below.
(3) I would carefully analyze the new deals they send me, or get a licensed professional to do so, before expressing interest in investing any amount of money.
(4) I would make sure to sign legal documents to formalize my investment, before sending my funds over.
(5) I would keep myself informed of the deal’s progress until it’s closed. If the deal were done right, then I’d own part of a great apartment building, and I could hopefully sit back and enjoy the monthly passive income.
*That said, remember that passive income in real estate is not guaranteed. See full disclaimer below.
If you want to speed up steps 1 to 5 as a passive investor, then you should consider joining my Real Estate Club.
It’s where new Club members get to plug in immediately with other real estate investors with ALL levels of experience.
You could likely execute steps 1 to 5 all in one place.
You could connect with new opportunities that could potentially increase your passive income, while increasing your real estate knowledge as well.
You’ll get to watch me, my team, and other Club members talk about deals of all sizes and apply important formulas on weekly Zoom calls.
It’s the best way I know of to get up to speed when it comes to passive real estate investing.
You’ll even get access to my comprehensive “Introduction Course to Buying Apartments”, its accompanying workbooks, and weekly Q&A calls to go through the material in the course.
This could help you make more confident, informed decisions as a passive investor looking for your first great deal.
It’s your choice, either way.
And who knows?
Maybe I’ll see you at my upcoming Real Estate Club call next Wednesday.
Once again, thank you for writing in, Dr. Sandra.
I feel blessed to be part of your real estate journey.
P.S. Check out what some of my students are saying:
“Before Grant Cardone, I owned 1 single family home. And now in one year, I’ve invested in over 2200 doors, with huge passive income that I didn’t have to trade time for money for. I will, within three to five years, have doubled my net wealth. You have to think bigger, you have to invest in yourself. Investing in myself was something I had never done before. And once I jumped into this community, I’m just continually growing and expanding my network and expanding myself, so that I can start thinking even bigger than I thought a year ago. 10X!”
– Meg Theriault, 12/27/2022, Real Estate Summit participant
“I just want to share a little bit about my story with what happened in the last 16 months. I joined the Real Estate Club. So it’s not a direct one of the other business boot camps or something. It was really through the Real Estate Club that I started and changed. And I started out with like 7 doors, which were all single families, then adding, over the 16 months, 200 units per month. So I have a little bit over about 3300 units now, $170 million of assets under management now as well. And all this really became possible because of the mindset changes that came with doing more with what I learned through the Cardone group, through the Real Estate Club.”
– Mike Bailey, Massive Capital, 12/20/2022, Real Estate Club member
*Results not typical. Please see full disclaimers below.
*This content is for informational purposes only. The real estate deals discussed on the Real Estate calls have not been vetted and are not endorsed by Grant Cardone or any of his affiliated companies. Before investing, you should always do your own analysis based on your own financial and personal circumstances before making any investment.
Grant Cardone is an industry expert who has been investing for over 30 years and his opinion is based solely on his own personal experience and circumstances. Grant Cardone’s and Grant Cardone’s staff’s opinions are not recommendations or endorsements from any of the Cardone Companies. You should perform your own due diligence and seek the advice from a professional to verify that any information on our website, calls, emails, or materials is relevant to your situation before relying upon the information before to make an investment decision. Investment involves great risk and there is no guarantee of performance or results.
Real Estate Club Members that embark on any investment together must also perform their own diligence. Grant Cardone, his affiliated Companies, his Employees, Guest Speakers, and associates do not make any personal recommendations as to the members and no member is vetted or endorsed. Any financial or business involvement with the other members of the group is done at your own risk and Grant Cardone and his affiliated Companies have no liability. Any Real Estate Club Member that is marketing, selling, or promoting products or services in the group that are similar to the products and services offered by Grant Cardone or his affiliated Companies will be removed from the Group with no refund and no notice.
This content is intended to be used for educational and informational purposes only. Before investing, you should always do your own analysis based on your own financial and personal circumstances before making any investment. Grant Cardone is an industry expert who has been investing for over 30 years and his opinion is based solely on his own personal experience and circumstances. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment. Investment involves great risk and there is no guarantee of performance or results.
We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.