The era of house flipping

My wife loves this HGTV show, “Bargain Block,” that features two guys in Detroit who buy abandoned houses, renovate them, and put them on the market. Their aim is admirable: they want to take the homes that no one wants and make them beautiful (and of course, sellable!). But, almost more importantly, they want to bring life back into the downtrodden neighborhoods where they purchase their properties. They want to help Detroit, one “block” at a time! 

There is a slew of fix-and-flip shows on the airwaves, so it can be easy to believe this is the norm for real estate investing. But, the reality is — fixing and flipping DOESN’T take advantage of the numerous benefits of real estate. 

Those benefits include hedging against inflation, tax benefits, loan pay down, and, most importantly — cash flow. Although these flippers may see a big bump in asset appreciation in a relatively short period, they’re missing out on the bigger picture. 

What is passive real estate?

Given the numerous benefits that real estate investing provides, it’s an attractive asset class to invest in. The thing is — the average person doesn’t want the hassle of finding and managing properties. This is where passive real estate comes into play. 

My company, BlackTree Investment Group, is a passive real estate investing company. What that means is — I, the sponsor, find, buy, and manage properties for my investors who don’t want to do any of those things! 

Real Estate Syndication

I do this specific kind of passive real estate investing through what is called a real estate syndication. I find people interested in investing in real estate, pool their money, purchase several properties, renovate them, and eventually sell them. We jointly benefit from the passive rent income and share the equity when the properties are sold.

Real estate syndication allows the average investor to get into this excellent asset class with little time and effort! And, just like the two guys in “Bargain Block,” — being a passive real estate investor in our projects allows you to improve communities! 

So, watching fix-and-flip shows is great entertainment! And I applaud the guys from “Bargain Block” for dedicating themselves to improving Detroit — but they’ll never get the benefits of real estate the way that you can as a passive real estate investor!