Strategy/portfolio: Active vs passive (local and non local)

[Kat N.]

Investor gurus, I would like to learn from your experience. I am starting out my real estate investment for about half a year. I have been with 2 active deals (flip and sell). 1. Per your personal experience, at what point do you start passive investment (e.g rental property)? I do see active give me fast money, but is requires lots of work. Do you keep both active and passive investment eventually? 2. I live in Bay Area so rental property cap rate is pathetic, it is about 5-6%. - Anyone in Bay Area actually invest in rental property? How do you make the numbers/the deals work? Any tips? - Anyone experience in investing out of your market? I am looking for advice to invest rental property outside of my market, such as pitfalls/great experience working with turnkey companies, local agents, local property management etc ... Thank you very much, Kathy L.

[Thomas S.]

Keep in mind rentals are not truly passive. If you invest out of state you must manage and stay in regular contact with your PM. You have a responsibility to manage the PM otherwise over a period of time your investment will slip. You will also need to regularly visit the property yourself to confirm it is being properly maintained.

Never allow trust to creep into your business investment plan.