What is passive investing? As the name implies, it’s an investment of a resource that requires very little from the investor other than the initial acquisition of the asset. The asset is acquired and held with no maintenance attached. There really is no forecasting as to the future value or return of the investmentpassive real estate investing because the return is already known,

such as a bond or a certificate of deposit. Just park the money and walk away. However, the returns on such investments typically have lower returns. Unless you’re speaking about real estate investing.

Passive Real Estate Investing means all the due diligence is prepared before the individual investor takes the first look. Real estate has a lot of moving parts and since it is real property it’s not the most liquid of investments. It’s a house or an apartment building. Real estate investors who are in the markets full time spend a considerable amount of professional time merely searching for the right property in which to invest. After a potential prospect is discovered, the next phase begins.

The investment is thoroughly inspected, more than once in most cases, and the amount and duration of repairs that are needed in order to bring the house to market is calculated as well as determining the final selling price of the real estate. This involves inspectors, attorneys, bank loan officers, real estate agents and contractors. For those who consider investing in real estate are held back once they find out how much professional effort is required prior to signing any sales contract, they most often decide that it’s simply too much work, not experienced enough and there aren’t enough resources to run the project.

Passive investing in real estate however means an entity performs all the required due diligence then prepares a proposal to potential investors who review the project then decide to participate. That’s it and nothing more. In return, the passive investor will receive double digit returns by doing nothing more than initial analysis and providing the funds. There are passive investors who buy and hold Treasury bonds, but it is the passive real estate investor who takes in the real profits.