PASSIVE INVESTING for INVESTORS

[Collette Scott]

Have anyone done business with the listed businesses?   What are the short and long advantageous and disadvantages investing with these types of companies?  Your comments, experience and advice is important. 

1. EquityBuild Finance has private mortgage notes that return a fixed rate of 14-15% APR, with returns paid monthly. Every note is 100% backed by income-producing real estate, and our investors are protected with first lien position. EquityBuild has had zero foreclosures in more than 700 transactions.

2. RealtyMogul.com is an online marketplace for real estate investing. We are often referred to as a crowdfunding platform, marketplace lender, or peer-to-peer lender. Whatever term you choose to use, we are here to connect investors who want to invest in real estate with real estate companies that need real estate capital – either debt or equity - it’s that simple.

[Don Konipol]

Passive investing vs active investing is not an absolute, it is a spectrum across which each investor must determine where they want to be, and what return and risk they will accept.  Some of this decision making is done almost unconcously by the brain, especially for seasoned investors. 

The most passive way to invest is to place your money in an irrevocable trust, appoint a trustee with full investment authority and never look back.  Everything else, including investing in a fund, requires a certain amount of "active", at a minimum doing enough research to decide if and how much to invest in the fund, monitoring the fund's performance, economic climate, future prospects and deciding if and when to sell.

Some people consider investing in individual trust deeds /mortgages passive investing. But passive compared to what? Certainly more passive than flipping houses, but less passive than investing in a REIT.

IMO investing in real estate notes can be divided into two parts.  The investing part - analyzing potential investment opportunities, monitoring performance, negotiating offers, buy/sell decision making and the business part - dealing with delinquency, foreclosure filings, note restructuring, collections, hiring servicers, attorneys.

Before determining anything about an individual investment, an investor should determine where he wants to be on the passive..........active spectrum.