You have probably heard of the term "mailbox money" (this is the concept when you get money in your mailbox with little to no work) and it can be...

I like to explain it like this, most people who investment with me are some sort of business owner who has done well and they have extra money to place somewhere and they just want to simply invest. These investors don't want to deal with scheduling and reviewing the inspections of a property, the closing, property management, accounting operations, lease compliances, and other issues that may arise. All of this is the operating side - I operate. I am fully integrated in all parts of a property. Do I get cash flow off of this and is there a management fee the tenant pays? Yes because real estate is not truly passive, unless you are just investing with an operator. So when you are thinking about getting into CRE, or really any type of real estate, think about what you want? Do you want to invest or do you want to take the time to operate everything? Don't kid yourself, this is a business, and another job.

If you want to be an operator, here are some advantages: you end up controlling all the properties you invest in, you generate fee income to run your operating side (you have to have staff - it takes people to get this done), and you also probably get to have some sort of promote structure with your investors. But, at the end of the day, you are the one touching the property, getting involved, getting your hands dirty, and signing your name on the dotted line.

If you don't want to handle the operations and just want to simply invest to make a return, go out and look for an operator who is looking for investors. You need to understand what the operator is doing, when they are going to pay you, when they are going to send you financial reporting, and so on. This puts all the responsibility on them and they are making a fee to do this which makes you a truly passive investor. Additionally, you are most likely a limited partner where you have limited liability and recourse against you in the event something goes south.

That's pretty much it. You either operate or you invest. You operate, you are going to own it. You invest, you are going to get updates... and checks.

- Jeremy