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Investing Tips and Helpful Information For Passive Investors
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Are you a Growth or Cash Flow Investor?
When I first started investing in real estate, I was often asked if I was a growth or cash flow investor. I constantly heard people referencing the infamous “cash flow is king” saying, but I never really gave much thought to it. At the time, I was a high-income earner at the top of my game in my sales career, and the main metrics I tracked for my household were annual income and net worth. Today I know that it’s much more important to understand if you are a growth or cash flow investor, and I’ll walk through a few reasons why below.
All Investments Are Not Created Equal – Important Metrics
You’ll find very quickly that there are about as many types of metrics to measure the returns of an investment as there are investment opportunities available to you. It’s important to know what the metrics are telling you, and which ones measure the results for your specific situation. In this article, we’ll outline the three main metrics you should pay attention to when investing in your first or subsequent passive investing opportunities below.
How are Passive Investors Paid?
In this brief article, we’ll discuss the Preferred Return and the infamous Waterfall which accounts for the two main areas where you can expect to receive returns in this space.
Are You an Accredited or Sophisticated Investor?
The topic of sophisticated or accredited investors comes up in this space as you need to meet certain requirements to invest in private placement investments like apartment syndications. Ultimately, the more sophisticated and wealthier you are, the more options you have to invest your hard-earned money.
Why I Switched To Passive Investing Versus Active Investing
About two years ago, I chose to go down the path of passive investing through the syndication model versus active investing in single family rentals. Here’s just a few reasons why I chose to do that:
5 Benefits of Passive Investing
1. Cash flow – Investors benefit from monthly or quarterly distributions to create cash flow to support your individual needs unlike traditional investments that hold on to your capital without any current benefit.
