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Old 01-09-2019, 03:53 PM
 
Location: Aurora Denveralis
8,717 posts, read 3,918,161 times
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Quote:
Originally Posted by Japanfan1986 View Post
Hehe I’m doing the same thing.
So in the end, you'll be a few percent ahead on a small fraction of your investments.

The only "passive" income idea that works is to own something of significant value that someone else will pay to use on the most remote terms. Investments and commercial RE managed by someone else (as mentioned) are about it.
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Old 01-09-2019, 07:23 PM
 
992 posts, read 715,729 times
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Quote:
Originally Posted by Quietude View Post
So in the end, you'll be a few percent ahead on a small fraction of your investments.

The only "passive" income idea that works is to own something of significant value that someone else will pay to use on the most remote terms. Investments and commercial RE managed by someone else (as mentioned) are about it.
So you just don't contribute to your 401K?

I'm not saying it's great, but being a few percent ahead can add up over time. It's better than being a few percent behind which can also add up.
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Old 02-05-2019, 04:11 PM
 
6,889 posts, read 3,109,754 times
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Quote:
Originally Posted by Japanfan1986 View Post
True, if you have enough liquidity to purchase the properties to begin with. Then you have to be careful with how much it costs to pay the third party to manage it for you. I’ve read that’s not worth it to get a third party until you have at least 5 units to rent. Although that is all subject to variables. Like if the unit brings in enough money even one could make sense, but if your margins are razor thin, but you know how to manage properties even 10 units may not make sense to get a third party.

I wouldn't do residential rental properties for all the money in the world, personally. And I'm pretty leery of big box retail. But if you're talking about office, industrial, or distribution, third parties actually make a lot of sense, chiefly because they have the staff and expertise to deal with the legal, operational, and maintenance issues--and typically can do it at a lower cost and better than you can. Your margins aren't as high, but it essentially becomes passive income while you still enjoy asset growth.

If you aren't a high-dollar investor, the thing to consider is a REIT or just going in as an investor in new projects. Even at the local level commercial real estate companies are always looking for capital. We're in several or those, the biggest one of which is in the industrial sector with an emphasis on distribution. While over time, it typically achieves somewhere in the 8-10% range in asset growth, it achieved a 20% return per share last year and pays quarterly dividends. I don't expect that kind of growth every year, but it's certainly nice when it comes. In that sense, we paid in in 2012 when it formed, and have enjoyed terrific returns on it ever since. The only drawback? Make sure you have access to enough cash on the off chance you have to pony up for a capital call. It doesn't happen frequently, but it can.

So, to answer the OP's original question, in the hands of the right management company, commercial real estate is pretty much a wind-up toy.
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Old 02-06-2019, 03:59 AM
 
Location: Pennsylvania
16,290 posts, read 5,612,964 times
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Quote:
Originally Posted by Japanfan1986 View Post
A completely turnkey operation rarely if ever exists, but hey who doesn’t love thinking about free money?

ATMs, laundromats, vending machines. I’m sure other posters have read about how these can work as good passive streams of income. I’m also sure some posters with actual experience in these fields might hope on here and debunk them as not passive as all. So I’ll state upfront that I have no idea how passive any of these businesses actually are.

So feel free to mention in this thread what forms of passive income prove to be just that and how passive they are. Ways of achieving supplemental or hey even full-time income are never bad to hear about. Lived experience is preferred but if you’ve heard of something and would like to know more post that too
I play daily fantasy sports which has been profitable. On average it has probably brought in $250 per month, over time.
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Old 02-06-2019, 04:03 AM
 
2,385 posts, read 1,008,894 times
Reputation: 4060
Real Estate Crowdfunding has worked pretty well for me. I invest in Groundfloor and Peer Street. 7 is percent returns.
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Old 02-07-2019, 10:29 AM
 
6,889 posts, read 3,109,754 times
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Quote:
Originally Posted by EmilyFoxSeaton View Post
Real Estate Crowdfunding has worked pretty well for me. I invest in Groundfloor and Peer Street. 7 is percent returns.

It can be for sure. I'm a little more of a control freak, however. I want to know the management team and be at least aware of their future decisions.
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Old 02-07-2019, 11:41 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
7,058 posts, read 4,944,850 times
Reputation: 9735
Quote:
Originally Posted by MinivanDriver View Post
I wouldn't do residential rental properties for all the money in the world, personally. And I'm pretty leery of big box retail. But if you're talking about office, industrial, or distribution, third parties actually make a lot of sense, chiefly because they have the staff and expertise to deal with the legal, operational, and maintenance issues--and typically can do it at a lower cost and better than you can. Your margins aren't as high, but it essentially becomes passive income while you still enjoy asset growth.

If you aren't a high-dollar investor, the thing to consider is a REIT or just going in as an investor in new projects. Even at the local level commercial real estate companies are always looking for capital. We're in several or those, the biggest one of which is in the industrial sector with an emphasis on distribution. While over time, it typically achieves somewhere in the 8-10% range in asset growth, it achieved a 20% return per share last year and pays quarterly dividends. I don't expect that kind of growth every year, but it's certainly nice when it comes. In that sense, we paid in in 2012 when it formed, and have enjoyed terrific returns on it ever since. The only drawback? Make sure you have access to enough cash on the off chance you have to pony up for a capital call. It doesn't happen frequently, but it can.

So, to answer the OP's original question, in the hands of the right management company, commercial real estate is pretty much a wind-up toy.
I don’t understand why commercial property with a manager is any different than residential property is with a manager.
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Old 02-07-2019, 05:46 PM
 
6,889 posts, read 3,109,754 times
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Quote:
Originally Posted by aslowdodge View Post
I don’t understand why commercial property with a manager is any different than residential property is with a manager.

My post was more in response to the poster who couldn't understand why he wouldn't do it himself. At the same time, I am of the opinion that multifamily is becoming--depending on the market--overbuilt. That's the same reason why I also didn't like retail, and am pretty glad we've stayed out of that. But, to your point, we like nice, safe, dull properties that consistently perform in geographic areas where we know. You know, nice ten-year leases. Just what I prefer.
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Old 02-09-2019, 05:46 AM
 
4,539 posts, read 3,709,119 times
Reputation: 9640
Find a source of some widget that can be drop shipped for you. Markup the widgets and blast an ad on Facebook that is targeted at your best guess of the demographic that will order the widget. Let Facebook's AI fine tune the target demo to more closely match that of the people who click on your ad. Continue running the ads as Facebook's AI learns and shifts the target to a more and more likely-to-click demographic. Rinse repeat as you find new widgets to sell. It's not entirely passive but it's not hard labor and it works. Facebook's AI's ability to identify and target likely buyers has proven to be scarily effective.
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Old 02-11-2019, 12:03 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
7,058 posts, read 4,944,850 times
Reputation: 9735
Quote:
Originally Posted by MinivanDriver View Post
My post was more in response to the poster who couldn't understand why he wouldn't do it himself. At the same time, I am of the opinion that multifamily is becoming--depending on the market--overbuilt. That's the same reason why I also didn't like retail, and am pretty glad we've stayed out of that. But, to your point, we like nice, safe, dull properties that consistently perform in geographic areas where we know. You know, nice ten-year leases. Just what I prefer.
I see. In many areas they can’t build enough multi family.
As businesses change, I wonder about commercial properties. It seems that demand could drop. For example an accounting firm could need less space since so much record keeping is digital , not hard copies. I winder if law firms would need less if their libraries become digital needling way less space.
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