The Passive Real Estate Investor

Mar 15, 2020

When we hear the term “Passive Investor”, most people may think “passive” means that you don’t have to do anything once you invest in a commercial real estate asset (or business).  The perspective may be to just make an investment and then forget about it.   Well it’s not that simple.

Its accurate that as a passive investor, you are not playing an active role in the day-to-day  management of the business you are investing in.  There will be asset managers responsible for effectively and efficiently operating that business you have invested in and in turn you hope to realize the positive returns of your investment.

However, it’s important to remember that when you invest passively in commercial real estate, there is no substitute for doing your homework before and after investing your money.   And unlike investing in the stock market, there’s a time commitment associated with that investment – typically three to five years – restricting early exit from the investment.   

You should have a good understanding as to when and how often the Deal Syndicator will communicate with the investors regarding the asset’s performance.  We recommend you keep yourself educated on how well the asset is performing and ask questions of the asset manager if returns are not to expectations.

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