The Difference Between Active vs. Passive Real Estate Investing
In real estate, there are many ways to get into the business as an investor. First, there is the decision to choose the type of real estate that interests you. In real estate, there are small residential properties, including single-family and small apartments. Then there are more significant commercial properties that include larger apartment communities, industrial, retail, office, and a variety of mixed-use / special-use properties. Regardless of the type of property class an investor chooses, the very first decision is whether to be an active or a passive investor.
As an active investor, you are involved in the day-to-day activity of operating the property. If you have ever owned a rental, you already know that being an active investor is like having another job unless you have a property manager, which would make you more passive. However, not all the way passive because you still have to deal with the administrative duties of owning properties like paying the mortgage, property taxes, and managing the manager. It is not entirely passive.
To be an entirely passive investor, you are partnering with a team that does all the work, which includes the administrative duties of owning that were mentioned above. In this scenario, a truly passive investor invests alongside the active managing team and receives distributions without lifting a finger to do any work. This is where the term "mailbox money" comes from.
The choice to be an active or passive investor is the first decision to make, followed by the type of property you want to invest in. At Wild Orchid Capital, we are active investors in apartment properties with 60+ units located in key markets within the business and landlord-friendly states. Our operating partners in these markets have excellent track records. As we develop and expand our relationships, our deal flow and opportunities to participate will also expand for our valued community of passive partners and us. In this way, we will grow together.
Our vision is to get to know every member of our community, so please be on the lookout for periodic invitations to connect and catch up in person or over virtual coffee!
To learn more about apartments and how your money can work harder for you by investing passively in multifamily real estate, Then Book A Call Today, and we will be happy to have an initial conversation. We are looking to build a community of like-minded forward-thinking people interested in leveraging the collective power of syndications to help us co-create financial legacies through apartment investing.