Passive Investing for new investors... is there such a thing?

[Trevor Lohman]

Hey Everyone!

I'm being a bit dramatic with my title here, but I do have a serious question if anyone is willing to provide some feedback.

I had recently asked a question in the forums about turnkey investing which led to a really educational and helpful discussion. This question morphed into a more general discussion about passive investing which is something that I am very interested in.

In my limited understanding it sounds like there are a few different ways to be a "passive investor". Turnkey investing, hard money lending, syndication, and note investing among them. Of these, syndication sounds the most appealing to me, but thanks to some very educational advice and guidance from Jeff Greenberg, a BP member and syndication expert... my words, not his. (Thanks for taking time out of your busy schedule Jeff!), I've now realized that I probably am not in the right place financially for investing in syndicated deals... yet.

So in the meantime, I find myself wondering... what are some passive investment opportunities for a new investor who like me has say 10k to 25k dollars to invest, but a relatively small net worth? Can you consider hard money lending with this small amount of money? Or do I basically need to resign myself to being patient and saving more?

I'd love some of your opinions if anyone has the time!

Thanks,

Trevor

[Jerry K.]

@Ron Kelley I take a portion of my tax lien investing funds and I look for liens on properties that have mortgages. If the owner doesn't pay the taxes, the mortgage holder will pay to protect their interest. 95%-97% of all property tax liens are paid off before going to foreclosure.

By looking for very good properties with mortgages you will most likely be paid off. There is always a chance you won't, but then you can go the foreclosure route to get your money or the property. However a good property will also attract many bidders and your lien yield may be lower than the maximum rate.

You have to accept in a tax lien investment that you don't know when it will be paid off. I've had liens pay off in as little as 2 weeks, and others are now at the foreclosure point. When I talk to someone who knows fixed income investing, I describe the liens I buy as fixed rate, variable maturity instruments. Yet there are some liens that actually pay more interest as time passes if the owner does not pay.