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Active vs Passive: Which investor are you?

What kind of investor are you?

I know I’ve been somewhat MIA lately.  To be honest, I had some pretty tough life circumstances that have taken all my time and energy.  However, it brings up a good topic for this week.  How much time and energy are you willing and able to put into your investments?

As an ACTIVE investor, let me describe my day yesterday:
I’m under contract on a property in Cincinnati at the moment (that means I found this off-market deal, submitted an offer that was accepted and am now in the due diligence phase).  I was up at 7am to be on a call with my broker who was on-site, overseeing the property inspector and termite inspector who I hired last week to go out and inspect the property for me this morning.  I was also on call with a property manager that I sent over to the property to look at the property from a management perspective.

After the inspection, I had follow-up calls with my broker and property manager to get their reports on the property.  Then I went to work at my day job. 

On my lunch break, I had a call with my lender to discuss the details of the loan that I was agreeing to, as well as his take on the findings from the morning (he’s a local to the area and I always value local perspectives on any and all things real estate).  We also discussed a few other potential opportunities, as well as added a few contacts to my list for the area based on referrals from him.

I had a call with Andrew, the city building inspector regarding the newly required fire escape inspections on this property (turns out the inspections are so new that only about 50% of owners have turned them in, so there’s no rush, as long as their done ‘some time’).

All these people I have developed relationships with over the past 10 months that I’ve been actively looking at Cincinnati.

After work, I came home, signed a stack of loan docs, sent a few more emails, and here I am writing this article to connect with you.

As a PASSIVE investor, let me describe a typical day for me:
I wake up, play with my son, eat breakfast as a family, go to work, go to lunch with my friends, work some more, go to the gym, come home to my wife and son, watch some TV and go to sleep.

All the while, in Lexington, Kentucky, where I have a passive investment on an 84 unit property, the team has been busy replacing air conditioning units, remodeling entryways for 5 buildings, continuing work on landscaping, leasing units to new tenants, renewing leases and ending leases with others, replacing select windows that were noted during inspections, renovating the current vacant units with all new vinyl plank flooring, new appliance packages and refinished cabinetry, the list goes on.

All that work that went on? Made ME money.  And how much work did I do on that property that day as a passive investor? ZERO.

In a nutshell, that is the difference between active and passive investments.  Either you are doing the work, or someone else is doing the work.  Both paths can make you a return on your money, you just need to know what you’re looking for work-wise.  For some people, active is the way to go, but for many others, passive investing is ideal.  How much time do you have that you’re willing to put into your investments?

When you invest passively in large multifamily deals like we provide here at Amity Cash Flow, you don’t have to worry about the day to day ‘stuff.’ Your main goal is to look at deals that we open to investors, invest your money, and then collect quarterly distribution checks.   Let me know when you’re ready to invest and we can talk about what opportunities I have available.

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