We are often asked how one can scale his/her passive income, once they decide to invest passively. While we covered part of the strategies in prior articles, we thought we’d summarize the top 5 in the form of a roadmap that you can easily reference.

1. Educate yourself. Education is an ongoing process, especially in the ever evolving markets, macroeconomic and geopolitical conditions that inevitably impact real estate and investing. Outside of reading and podcasting, connecting with fellow investors at local real estate investor associations or investor clubs is a great opportunity to stay abreast of markets, make connections, deepen relationships and find your future partners or the sponsors you’d like to invest with. Subscribe to various investor and syndicator lists, so you can start to get to know them and learn about the industry.

To help you be a better educated and more empowered investor, we created The Busy Professional’s Quick Guide To Investing In Multifamily. We have also compiled and continue to add a ton of educational resources on our website, including books, videos, podcasts, and upcoming events.

2. Choose the investment vehicle. Real estate presents many opportunities for investing – new development, single family, small or large multifamily, self storage, industrial, hotels, retail, etc. As you begin your journey, this can feel overwhelming. After you have educated yourself on the matter, select one asset class, take action, and stay focused. That is not to say that you cannot diversify down the road. In fact, you should. However, taking it one step at a time can help make the process less overwhelming in the beginning.  

3. Determine your available capital to invest and know your financial position.  In prior articles we suggested a few resources one could tap into, in addition to savings. You should not risk your last dollar in your first passive investing deal. Unexpected life or other events always happen and you want to have decent cushion to respond to those. Be real and honest with your financial situation and when taking risk, take thoughtful calculated risk.

4. Determine your investment criteria (cash flow, appreciation, or both), investment objective (tax shield, wealth building, etc.), investment horizon (short/medium/long term) and target returns. This will later help you later on, as you start prescreening investment opportunities.

5. Take action, track performance, rinse and repeat. It is easy to get bogged down into analysis paralysis. However, after you have taken the steps above, it is important to take that first step and make that first investment. We previously illustrated how investing $50K a year and reinvesting that amount can grow over time.  Timing the market is very difficult and almost impossible (we do not attempt or aim to do that). Time in the market is priceless as that is the one factor you cannot reverse. As the Chinese proverb once said “The best time to plant a tree was twenty years ago. The next best time is today.”

Should you have any questions or want to learn more about real estate investing or for an overview of our target markets, please reach out to info@dbacapitalgroup.com.

Disclaimer: The information presented does not constitute legal, accounting, tax, or individually tailored investment advice. Past results do not represent or guarantee future performance.