It’s a tale as old as time – boy meets girl; girl mentions Real Estate Investing (REI); boy becomes hooked on REI… Well maybe it’s not that old of a tale, but that is how I got started in the industry of investing in real assets.
A co-worker that I’ve known for several years mentioned she was looking for another income stream and was thinking about flipping houses. Next thing I knew I had ordered a dozen books and listened to hours of podcasts. And the switch flipped in my head. The idea of REI seemed so exciting. But where to start?
I quickly found there were several ways to approach my new interest: wholesaling, flipping, buy and hold, BRRR… So many options. Suddenly I found myself infected with SOS – Shiny Object Syndrome.
The more I read, the more I listened to podcasts; the more I networked, the deeper I fell into it. There were so many options and they all sounded fantastic. I think many investors, new and experienced, have gone through this as well.
Through all my early research into REI, I continued to hear a common theme: “Pick an area to focus on and stick with it!” But how do you pick when you are just learning? How would I know what I would enjoy doing? What if I’m missing out on a better option? These are probably questions that have been asked by or to all of us.
My journey started with single family buy-and-holds. This seemed like a simpler way for me to plug myself in to the business. After all, I had watched plenty of HGTV so I had ideas in mind.
I quickly learned this was not as easy as I thought. Working a full time W-2 job did not afford me a lot of extra time to devote to looking at potential deals, rehabbing a property, finding tenants, and being a landlord. Watching friends of mine struggle with their rentals helped support the feeling that I had that this wasn’t what I should be focusing on right now.
Next, a group in my network approached me about starting a wholesale business. This sounded intriguing to me. I wouldn’t have to deal with all of the things that worried me about the buy-and-hold process. I would get a distressed house under contract and sell it to another investor without ever having to lift a hammer or screen a renter.
Again, I found out about the harsh truth of this part of the industry. The business took a lot of my time and energy cold calling property owners, finding time to walk through properties just to get stood up by the owner, trying to build a list of potential buyers, and more. This wasn’t exactly what I had in mind when I was thinking about what to focus on either.
But I was not going to be deterred. I knew this was still what I wanted to do. I just hadn’t found the right thing yet. All of these shiny objects seemed like great ideas and they can be for the right person, but they weren’t really working for me.
Finally, an option presented itself that seemed tangible. At one of the local meet-up discussions, the founder of the group spoke about how he had tried several different options as well and ultimately ended up in the passive investing arena. He spoke about how he had been able to leave his W-2 job because he had replaced his active income with passive income from the syndications he had joined. THIS WAS IT!
I heard him describe a lot of the same things I was experiencing. He worked while trying to invest in different areas. He wasn’t finding the right area to focus on initially. He landed in a space that allowed him to invest while working his regular job and then eventually was able to leave it to invest full-time. This sounded like what I wanted to do as well.
Luckily, all of the experiences I had been through still supplied me with a good amount of education. I took some time to go back to my goals to analyze what was important to me. And passive investing checked the most boxes. This was finally an area I felt I could focus on, and it would help me achieve my goals.
So, if you are struggling in the SOS world like I was, trust that you are not alone. Your journey may not work exactly the same as mine, but here are some areas to look at that may help you find your way.
- FOCUS – I have to say that all of the people that told me to focus on a specific area were right. Being able to dig into one area and educate yourself on that business is very valuable.
- GOALS – make sure you have set clear goals for yourself and review them often to decide if your choices are aligned with your goals. That is what helped me identify passive investing as my best choice.
- EDUCATION – This can mean lots of different things. Read books, listen to podcasts, check out blogs, and network with people who are more experienced than you are in the area you are trying to focus on, as a few examples.
- TAKE ACTION – When it boils down to it, getting out there and doing something was the best thing that I did. I made mistakes and got involved with things that weren’t the right answers for me, but I wouldn’t have known if I didn’t give them a try.
To date, I have invested in two syndications, and I’m actively looking to get into more. I see a path that will get me to my goals all within the passive investing space. I hope that my story will help you in some way as well. Best of luck!
Chad is a part time investor in passive real estate while working a full time W2 job. His goal is to develop enough passive income to work on real estate investment full time and retire from the corporate world. He has previously invested in four syndication deals and done some private lending. He also leads a group of investors also working in the passive investment space. If you wish to contact Chad he can be reached at [email protected].
Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.