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Updated almost 14 years ago on . Most recent reply

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Passive Unleveraged Investment?

Franklin Schmidt
Posted

I have no intrinsic interest in real estate. My interests, in order, are:

1. capital preservation
2. stable returns
3. yield

So why am I here? Because I think unleveraged residential rental real estate in middle America best satisfies my interests. I have researched many investment options including the usual - stocks, bonds, and commodities. None of these meet my needs today and all are overpriced.

I have read books on real estate investment and these books are badly misaligned with my interests. The books advocate leverage to increase yield at the expense of risk to capital preservation. They assume active real estate investing when I have no interest in this.

When I invest in stocks, I buy mutual funds. I have neither the interest nor the knowledge to pick individual stocks. So I pay an expert, the mutual fund manager, to do this. Why isn't there something analogous to this for residential real estate? This is what I want. Yes I know the standard real estate options like REITs and real estate operating companies. These generally have leverage, aren't restricted to residential real estate, and aren't nearly as transparent as a mutual fund. So they don't satisfy my needs.

Any suggestions to solve my investment dilemma would be greatly appreciated.

Most Popular Reply

User Stats

188
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118
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Chris Weiler
  • Flipper/Rehabber
  • Anaheim, CA
118
Votes |
188
Posts
Chris Weiler
  • Flipper/Rehabber
  • Anaheim, CA
Replied

A possible option for you is to find a business partner who has experience finding and managing rental properties. Assuming you find a competent partner, they can handle all the day to day operations and you can go on without hassles. You provide the capital and he/she provides the sweat equity. This would satisfy all the goals you stated above and should provide you a very decent return.

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