All Forum Posts by: Terra Padgett

I would start with talking to people you know who are borrowing for real estate projects. Figure out what your lending criteria would be. Determine how you plan to protect your investment. Starting out, I would recommend only private lending to people you know, like and trust well. 

It's good measure to move it to an LLC or a Real Estate Privacy Trust for asset protection.

Has anyone invested internationally in the Dominican Republic? We’re considering an AirBNB out there but am curious if anyone has experience investing in that country. Would like to hear your thoughts and insights. 

I would suggest looking into a Real Estate Investing Club that group invests into a lot of larger deals such as Multifamily, Industrial, Funds, etc. In this way, you’ll be able to 1) network with a community of investors 2) vet deals together and pull from collective knowledge, experience, expertise as opposed to going at it alone 3) pool capital as a group as opposed to tying up large sums of your own money into a single deal 4) learn real estate and investing as a whole 5) create Passive Income streams in lieu of you getting out there and swinging a hammer, and the list goes on. These clubs are truly for those who want to deploy their capital and have it grow passively. Google them and do some research or Check out power pool fund .com for an example of how one might be setup, ran, and be beneficial to your interests. 👊🏽

If you're trying to be passive and do SFH, then a turnkey provider in a market you select would likely be a better option. It's imperative to find the right team if investing from afar. So your boots on the ground contractors, property managers, realtors, etc. No matter which route you take, you'll certainly learn things along the way which will help in your next deal and decision.

Landlording certainly has its challenges. A great Property Manager can make all the difference. 5 years in, I’m still unimpressed with any of them that I’ve come across. I see why a lot of people elect to self-manage because finding a reliable, capable, professional PM who keeps their incentives aligned with their investors is a rarity in this space. Do you agree or disagree? How have your 3rd party managers performed for you on a scale of 1-10?

Landlording or Direct Property Ownership (PM in place or not) is NOT all that passive. With a PM, it can become semi-passive, but your duties are more managing the manager to ensure they are keeping your best interest at the forefront. The spectrum of PM and their level of "good" is so broad. You really just have to interview a few and trust someone. Give them a year and re-evaluate their performance. It's your property so it's discretionary to what YOU think is a good job or not. From my experience, the heavier interaction with a PM comes about when their is a larger maintenance issue or tenant didn't pay rent. Regardless of a PM or Self-Managing, Rental Properties are not a truly passive investment. I prefer to invest my dollars in private equity placements, notes, funds, etc by way of investment clubs. When you group invest, you still get the same benefits as direct ownership (cash flow, appreciation, tax benefits, etc) with a lot less Landlording Headaches. Our club, Power Pool Fund, has been a game changer for our passive investing goals. Check it out...

 Thanks for sharing your experiences. If you're only seeing or looking at 8% returns from someone's fund, then we need to connect to open your pool of opportunities. lol. Personally, I've found the $250-$400 (or whatever) per month in rental property cash flow not enough for the task at hand. You're just creating another job for yourself. Of course every market and deal may vary, so I'm just throwing out some average numbers, but the juice isn't worth the squeeze for so-called passive income. And don't let an eviction, vacancy, property damage, capex or anything of the sort hit; cash flow wiped out for the year and then some possibly.  

Yep! There are A LOT of ways to invest your money into real estate without being a direct owner of rental properties. You discover which investment best fits your desires and run with it. We've divested several properties and re-deployed that capital into private equity placements and promissory notes via our REI club, Power Pool Fund. It's by far been a much more pleasant experience than Landlording. The properties we still have give me angst every month. lol...

If that's your jig, then have at it. If you want to be an Operator & work work work with All the control, then be my guest. That just becomes your day job (and nights and weekends too...lol) But if you're trying to earn Passive returns in real estate, especially with assets that have higher potential ROIs, then handing over control to those with experience in the field is just wiser IMO. The intent is not to invest with any and every "GP" on the block, but so is not renting a SFH to any tenant that applies. Yes, your funds are illiquid for a time, but real estate is the long game anyways. A public REIT tracks waaaay too closely with the stock market and provides very minimal diversification from the market.

Thanks for your thoughts