Looking To Participate In The Real Estate Market?
There are several ways to get start investing in commercial real estate. Your participation will fall into two main categories.
Passive Investors
Who is a Passive Investor?
A passive investor is someone who deploys their capital into an asset and does not get involved with the day to day decision making and operations of the asset. They often have little say on the sales decision as well.
Ideal Candidates
Passive investors are usually private lenders or silent partners who want a hands off approach to investments but would like to participate in the real estate market.
Ideal candidates for passive investors are typically people with full time jobs in careers outside of real estate.
Risks/Rewards
While the financial payout is lower, as a passive investor you get to leverage the efforts and resources of the active investor. This is an ideal investment strategy for someone who has money but little time.
As a private lender, your investment is secured by a first lien position in the asset where you can earn above average returns on your money. In the event of default, the lender is the first in line to receive their payout.
Many private lenders are investing in commercial real estate with their IRAs and 401ks. Visit the page on Investing with Your IRA for more information.
Active Investor
Who is an active Investor?
An active investor is someone who deploys and utilizes their resources and efforts in order to invest in real estate. An active investor could be bringing in their own capital for an equity stake, or bring in their expertise and network. Often times the active investor has both capital and know how and will leverage their efforts to source, evaluate, invest and profit off a real estate investment.
Ideal Candidates
Active investors are usually driven individuals who want to be involved in the day to day operation of the investment. They’re typically entrepreneurial and are relentless in the pursuit of their goals.
Ideal candidates are people that are willing to work on a team and share the risk and rewards of the investment asset. Usually active investors are full time involved in real estate.
Risks/Rewards
Active investors bear the entirety of the risk and entirety of the rewards. If the investors agrees to receive a loan, they are liable for that entire loan regardless of the performance of the property.
This is not a solicitation or offer of securities. Investments in any real estate offered only to qualified investors through a written Investment Agreement or Private Placement Memorandum.
Interested in learning more on how to participate in real estate investments?
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