There really isn’t one better than the other. It all comes down to what you want to do and what you have time for. 

Active investing involves marketing out to properties, developing relationships with brokers, raising capital, underwriting deals, sending out offers, and walking properties to perform the due diligence. As the name suggests you are actively involved in the deal. 

As a passive investor you are not doing any of the active stuff. You are simply doing your due diligence on the syndicator and doing a high level underwriting of the deal to make sure it is what you are looking for to achieve your investment goals. (I wrote an eBook on how to tell if the underwriting was done correctly. Make sure you refer to it when looking at deals). 

Both – the active and passive investors – benefit from each other. The passive investors for the most part tend to be busy professionals who are really good at their current profession and their time is limited to perform duties as active investors. Active investors on the other hand, are experienced at doing deals and making big profits in Real Estate but need the capital from passive investors in order to purchase big properties that the average person can’t fund on their own. 

I personally act as passive AND active investor. I truly believe in what I do, all my excess active income which comes from flipping properties is thrown into syndications. 

Hope this article was helpful!


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Satch Bernhardt
Deep Sea Equities, LLC

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