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The Active vs Passive Investing Real Estate Debate

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” — Andrew Carnegie

We’re gonna open a can of worms today.

Which is better: Passive investing or active investing?

This is an age-old debate.

Should I be the one flipping houses or the one raising money for deals?

Should I deal with the tenants myself or get a property manager?

I think the better choice really depends on your situation.

Is it possible to do both?

The answer is yes!

I actively invest by raising millions for real estate.

I also invest passively.

Today I’m going to go over three tips to help find what’s best for you!

1. Active vs Passive – Which is Better?

When it comes to real estate investing, is active better or passive?

The answer depends on a few factors.

Do you have time or do you have money?

Depending on which one you have, that should lead you in a certain direction.

People don’t always stick to this.

I worked in medical sales for years with some doctors making over $1 million dollars per year.

For them, it made a lot more sense financially to make money at their job and passively invest.

They were able to work their job, make money, and deploy it into deals.

A lot of people don’t know how to deploy money.

That’s why we do these blogs!

We help passive investors understand how to passively invest and grow their wealth.

Whatever they choose, they make it work in a way that’s good for them.

A benefit of passive investing is that you can grow your wealth without taking up your time.

Let’s say you don’t have money, but you’ve got time.

You can leverage that time to go network with other investors.

You can find deals and operate deals.

You’ll help busy people who have money to invest.

For active investing, raising money or finding deals are both great ways to start.

I always recommend people start in multifamily rather than single family.

A lot of people think you can become financially free through single family, but that’s rare and can take a long time. 

If you’re flipping houses, it’s another job.

You have to get to a huge scale before turning a profit.

It’s not a very efficient way to invest.

When I started, I didn’t have time or money.

I had a good job, but I didn’t have much savings.

I didn’t have a lot of time.

One thing I did have was success at my job.

I was a rockstar rep and won some awards.

Because of that, I developed a talent for working independently.

Nobody was watching me or breathing down my neck day after day.

With that freedom, I started doing work in real estate investing about 20 to 30 hours a week.

Over time, I became great at multifamily investing.

For those without 20 to 30 hours, there are shortcuts in the form of coaching programs.

Just make sure to do your research and choose the one that’s best for you!

2. Passive Can Be Used to Learn Active

You can learn about investing and how to work with investors when you invest in a deal.

If you invest in one of our deals, you would learn how we communicate with investors, present our deals, and how the tax forms work.

It’s a great learning process to become active.

Why do I passively invest?

I have a lot of my wealth in my own multifamily deals.

I also invest in other people’s deals to diversify.

Specifically, I diversify in asset classes.

I invest in ATM machine funds, self storage, bitcoin mining funds, and precious metals.

Passive investing gives you options for the future.

It doesn’t lock you in.

We should all aspire to become full-time passive investors one day.

Becoming a passive investor allows you to have freedom over your time.

You can always make more money, but you can’t make more time.

As you become wealthier, you can find ways to deploy more money and regain your time.

3. So What’s the Verdict?

When push comes to shove, what’s the verdict?

As I said earlier, the right answer depends on if you have money or have time.

Another factor is your passions.

What are you passionate about?

What can you spend time educating yourself about?

If you’re interested in passive, that will allow you to grow wealth without taking up more of your time.

You’ll vet the deal, the property, and the team, and then at the end you receive the mailbox money.

Active might be a better choice if you want to learn the business.

Maybe you want to do what I did and 20x your net worth over a few years.

That is absolutely possible!

You can use the power of other people’s money to raise money and participate in big deals.

You could be like Deion Sanders, the famous 90s football and baseball player.

He played football and baseball and it worked out really well for him.

Now I want to hear from you!

What investment type are you choosing?

Are you choosing to be more active or more passive?

Why did you choose that route?

Stick your answers in the comments below.

Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.

If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.

Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.

Bronson Hill

Bronson used to work as a consultant for a medical device company but switched to investing in apartment buildings to make his money work for him. He started with a single rental property that made good money and, after some advice from a family member, moved into bigger real estate projects. Now, he's all about helping others get into this kind of investment to earn money without having to work all the time. When he's not dealing with investments, Bronson loves to travel, write songs, stay active, and help fight modern slavery through his work with Dressember. He believes in working smarter, not harder, and wants to share how that's possible with everyone.

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