Where can you still find passive income in Real Estate?

Happy Saturday folks!

First off let me say, apparently my post on Thursday about cash flowing rental properties struck a cord with some of y’all!

Way more of you than anticipated replied to me or DMd me on Instagram and I greatly enjoyed our conversations!

Many of you agreed with my sentiment.

A few of you said I just dont know how to get creative enough or am not doing the right kind of deals (I disagree but we can still be friends 🙂 )

And a handful of you asked where I thought Passive Income MIGHT be found if someone really wanted it.

So, I wanted to make a quick note on that last question regarding finding passive income.

Now the good news, there is a specific part of Real Estate that is 99% passive, and you can make pretty solid money with it.

The problem is, you kinda NEED money to be able to do it.

And that is…. LENDING.

Either Hard Money or Private Money. The difference? I have no idea. I think it kinda comes down to if youre a Hard Money Lender you kinda gotta be a dick to the investor and treat it like a business transaction because its all about MONEY, where as “Private Money” lenders are all fluffy and make newbie investors feel special and support their project.

Now this is NOT a pitch to give me money (I’m not one of those people although we do happily accept investor money when people want to give it), but I do think that as you start to create your own MASSIVE INCOME, the easiest PASSIVE INCOME comes from becoming the bank.

This is honestly what I do with all my surplus cash at this point and where nearly all of my Passive Income comes from.

Instead of saving up for a new property, I dump my cash into a high yield savings account paying 4.8% and then Dan and I have a fund where we lend at 12% and 2 or 3 points to either SCALE Community Members or to known buyers in our network.

With the turn rate of our money we have been getting an 18% cash on cash return which has generated multi 6 figures per year of earnings that we can either collect or just continue to dump and compound back into the fund.

The 1% of work comes from doing the initial underwriting of the borrower and creating the initial documents, but honestly 90% of the time closing attorneys in most states will know how to prepare the appropriate Deed of Trust, Prommisorry notes, and any other required documents for the transaction.

Then you just need to verify the borrower has cash available in case things go bad, has OK credit, a good track record, and that the deal makese sense and BOOM, easy returns.

Like honestly every time I have to send out a plumber to fish a tampon out of a tenants toilet or get that dreaded “there’s water in the ceiling” call from a tenant, I wonder why I dont just sell them all off and dump more into the fund.

Heck now as I keep thinking about it, maybe I will.

Anyone wanna buy some properties in Spokane WA? haha!

Just food for thought, if any of you have interest in how we set up our lending stuff as always dont be afraid to reach out by replying here or on Instagram.

Have a great weekend everyone,

Mike