AcreTrader presents new farms or timber tracts weekly while declining to offer 99% of the farms they consider to investors. Some deals overperform their projections, some underperform, and my one or two investments on a platform should NOT be taken as a representative sample.įor example, Crowdstreet’s deal flow is very steady, with several offerings weekly. Most of the platforms and operators have offered dozens, if not hundreds, of real estate investments to potential investors. I don’t think jumping into the deep end of the real estate pool to either sink or swim is a good approach for most people, and it was certainly not for me. I’m now at the point where I’ve been comfortable making a six-figure investment in a real estate fund with a single operator, but I don’t know that I would have gotten there without slowly wading into these waters. The JOBS Act that allowed for these platforms has only been around since 2012, and I think it’s a good idea to diversify across different platforms. With any asset class, diversification is a good idea, and in the case of crowdfunded real estate in particular, there is no Vanguard with 40+ years of experience. There’s no better way to learn how these investments work than by becoming an investor yourself with a tiny sliver of your portfolio.Īlso, with some of these platforms, I’ve had advertising or referral relationships in place, and I figure if I’m researching them and presenting them as potentially viable options for your investment dollars, I should be comfortable investing with them myself, which I’ve done in most cases. I’ve asked myself the same question at times.įirst, I wanted to dip my toes in the water with small sums of money. properties sold or loans paid back), but 10% of our portfolio is a fair rough estimate. Valuation of some of these investments can be challenging, as we don’t necessarily know the true market value of some of these real estate investments until the deals have been completed (i.e. As of early 2022, these various passive real estate investments represent about 10% of our investment portfolio. Wanting to diversify across deal types (debt, equity, eREIT), and across different investment platforms, I made about a half-dozen investments in the first part of 2018.Īs I continued to become more familiar with my investment options and the platforms offering them, I broadened my scope to include larger investments in crowdfunded syndications and real estate funds. I started small with a few investments five years ago in January of 2018. The volatile nature of REITs combined with the availability of numerous additional ways to invest passively in real estate as a result of the JOBS Act passing and me becoming an accredited investor led me to seek out other real estate investments. My first investment in passive real estate was made in July of 2013 when I bought shares of Vanguard’s Real Estate Index Fund (VGSLX), a collection of publicly traded REITs (Real Estate Investment Trusts). Returns have been updated most recently on. In this post, I’m detailing my various passive real estate investments - ones that don’t require any effort from me other than a bit of due diligence on the front end and a bit of extra paperwork to pass along to my CPA. Some of those became rental properties and flips, but were not necessarily intended to be investments. Note that I won’t be talking about the properties we’ve purchased to live in (covered here, here, and here) or land we once purchased to possibly build on ( covered here). This post brings my seven completed passive real estate investments and seven ongoing investments together in one place, and I’ve updated my investment my returns and time invested for 2023, which, in some cases, is now up to five years.
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