Building a Successful Real Estate Portfolio as an Active or Passive Investor


Some investors LOVE the nitty gritty … they’re down in the dirt doing deals and building portfolios for themselves and others. 
Then there are investors that LOVE reaping the benefits of real estate but don’t want to get their hands dirty. 
It doesn’t mean they are less passionate … or have to be less successful. It just means that maybe they’re too busy with their day job, running a business, or enjoying the passive benefits of their investments. 
Today, we’re talking about different approaches to building successful real estate portfolios. 
In this episode of The Real Estate Guys™ show, hear from:

  • Your hyperactive host, Robert Helms
  • His passive co-host, Russell Gray
  • Regular contributors and super-successful investors, Dave Zook and Brad Sumrok

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Building portfolios passively

One of the best ways to learn about investing is by talking to investors who have been there and done that. 
Today we’re going to hear great stories from successful investors as we discuss building a successful real estate portfolio … as either an active or passive investor. 
There are two primary ways to invest. 
You can invest actively … be the one out there finding markets, dealing with agents, talking to lenders, qualifying for loans, and putting deals together. 
Or, you can invest passively … working instead to find great partners, great syndicators, great real estate people and mortgage teams and letting them do the work. 
If you’ve listened to us before, you know that we are big fans of this syndication approach.
Whether you are investing through somebody else or in your own account, you are responsible for building and developing your own portfolio. 
The thing is, most of us aren’t trained. We don’t do portfolio management professionally. We’re just trying to figure out how to do real estate deals. 
One of the neat things about being a real estate syndicator is that you can pivot when the market changes. 
We’re fortunate to know people who have put together big portfolio services and have a perspective that we think is valuable for everybody out there to hear. 

Real assets, passive investments

The gentleman we are speaking with is one of the top commercial real estate brokers in Memphis, Tennessee … Dave Zook. 
Like so many people who get into the apartment niche, he ran out of his own money and started to think about syndication. He began raising capital … and had big success. 
In five short years, he has raised nearly $200 million. And now he helps other people work toward the same outcomes … and the essence of being a syndicator is helping other people. 
But it wasn’t always that way. 
“I had specifically made up my mind that I wasn’t going to be a real estate investor,” Dave says. “But, then with some of my businesses I got to the point where I was paying around a half a million dollars a year in tax.”
Dave says that he realized that real estate could be a source of cash flow … a great way to build wealth … AND a real tax protection vehicle. That’s what drew him in. 
There are a variety of ways that investors can invest. Dave and his team focus on real assets. Though he started in multifamily, there are many other ways to get involved. 
One example is self-storage space. 
“I was looking for an asset class that I knew typically does very well during some kind of recession,” Dave says. 
Like all asset classes, Dave did his homework and found a team of experts who were comfortable and successful in the space to partner with. 
Self-storage is a great option for syndication because it is difficult to invest individually. Most of these facilities are large and require a significant amount of cash to start … but the payoff is great. 
Another asset Dave has passively invested in is ATMs. Not every ATM is owned and operated by a bank.
“There are a lot of independent ATMs out there. It’s a big range, and it is very profitable,” Dave says. 
The point … syndication isn’t just about real estate. It can be put into play for a variety of asset classes. 

Types of passive investors

So, what type of investor invests alongside a person like Dave who is out there making deals happen?
Dave says, for the most part, the individuals he works with are small business owners … neck deep in running their own businesses and very, very busy. 
These people don’t have a lot of time to be out researching different asset classes, but they still want a good return on the capital that they are putting out into the market. 
There are also a decent amount of high-paid professionals … doctors, lawyers, surgeons, dentists, and the like … who are looking to find deals where they can offset ordinary income. 
Generally speaking though, the classic passive investor is somebody that has more money than time. 
They could go out and look for their own deals, but they’re busy doing whatever it is that allows them to have the money to put into the deals. 
That’s why syndication is so appealing to them. 

Get ready for AIMNATCON

Our second guest is the apartment king … Brad Sumrok … here to remind all you investors out there that AIMNATCON … the Apartment Investor Mastery National Conference … is coming up. 
“Today, people’s lives have been disrupted and yet the apartment business goes on,” Brad says. 
This year, the conference is 100% online … so people from all over the world can participate from the safety of their own homes. 
This event brings together some of the best teachers, speakers, and investors on the planet. 
For more about AIMNATCON and building your portfolio through passive investing … listen to the full episode!


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