How to Become 100% Passive with Real Estate Investing?

[Travis Watts]

There are all types of real estate investors. Some that love to be actively involved and others that prefer the "real estate" asset class, but don't have the time to commit to it. I started off as an active real estate investor doing fix and flip and single-family buy and holds and vacation rentals. Over time it became too much of a time commitment and I wanted to pursue other full-time ventures in my life. I realized that I didn't have to "give up" real estate or sell everything to become a 100% passive investor. I transitioned into multifamily syndications for the past several years in order to achieve the passive status I was seeking. I'm curious if there are other strategies or techniques to consider for someone who wants to be a passive real estate investor. Thanks for your comments!

[Michael Wagner]

I do not personally believe in PASSIVE income.  To me, there is no such thing.  While it is possible to not be swinging a hammer or renting space etc, the use of the term passive implies "free lunch" to me. Even triple net arrangements and investing in diversified funds requires work up front to pick the right investment and a certain degree of education to even get to the point of making a smart decision.  And then, there should be regular "oversight" of your assets/portfolio to ensure you should remain in your chosen assets and not "re-allocate". As such, I prefer the term RESIDUAL as it more accurately reflects the fact that we, as investors should ALWAYS be at the helm of our portfolios and we often "work" (even if in the form of education) without any pay at all for months or years before the income starts.  

And I realize many may view this commentary as nothing more than semantics but the language we use is important! 

All that said, I LOVE residual income.  My chosen asset class is self storage as I find it to meet my investment objectives without require too much "ACTIVE participation". I spend roughly 5 hours per week managing our stabilized properties to create roughly $100K-$250K in positive cash flow depending on where we are in our own growth/stability cycle.  Currently we are in a growth phase that brings with it a cash flow situation on the low end of the range while simultaneously increasing the work load as we have $1.2 Million deployed in re-development deals. Once these two pending projects are stabilized, we should be back to the higher end of the range of cash flow and work load should fall back to 5-8 hours per week to manage the whole portfolio.