Are you looking for ways to earn passive income? Let’s delve into some effective strategies to make your money work for you. As Warren Buffett famously said, “If you don’t find a way to earn money in your sleep, you’ll work till you die.” This quote encapsulates the essence of passive income: setting up streams of income that require minimal ongoing effort.

Focusing on Real Estate

While there are many avenues for earning passive income, such as dividend stocks and affiliate marketing, I will concentrate on real estate. With over a dozen years of experience running a real estate investment firm in San Antonio, Texas, I can share some insights on this lucrative field.

Misconceptions About Passive Income in Real Estate

First, it’s crucial to dispel a common misconception: owning and managing real estate properties is not passive income. Whether it’s rental houses, short-term rentals like Airbnb’s, apartment complexes, or self-storage units, being an operator is a full-time job. Managing properties involves hiring staff, dealing with tenants, and handling maintenance issues. For instance, our company employs about 65 people who work daily on our portfolio, so it’s far from passive for me as an owner.

However, there are truly passive ways to invest in real estate, which I’ll outline below.

1. Syndications

Syndications involve a group of investors pooling their money with an operator who manages the deal. A common example is a multifamily apartment complex. The operator might own 30-40% of the company, while passive investors (limited partners) own the remaining 60-70%. As a passive investor, you contribute capital and receive cash flow without having to manage the property. Your returns depend on the project’s performance, offering both potential upside and downside risks.

2. Notes and Lending

In this model, you act as the lender. For example, we finance land purchases, such as 50-acre ranches in South Texas. Buyers pay us monthly mortgage payments, typically at higher interest rates. If they default, we can foreclose and take back the land, making this a relatively hands-off approach after the initial setup.

You can also lend to house flippers or developers for short-term projects, often at double-digit interest rates. These loans are secured by real estate and provide monthly distributions, though they usually have a finite timeline, such as 12 months. If the borrower defaults, you can reclaim the collateral.

3. Fund Model

The fund model is highly compelling for passive income seekers. Here, you invest in a fund managed by experienced operators who handle all the work, from finding and closing deals to property management. For example, our fund pays out monthly distributions with double-digit returns and includes diverse investments in single-family homes, multifamily properties, industrial land, and land notes.

In a well-structured fund, you can enjoy consistent returns for as long as you remain invested, making it an ideal option for long-term income.


To summarize, real estate offers several pathways to passive income:

  • Syndications: Become an equity owner in a managed project.
  • Notes and Lending: Act as a lender for land or development projects.
  • Fund Model: Invest in a diversified fund managed by professionals for consistent cash flow.

If you’re exploring passive income opportunities and want to learn more about our fund, feel free to connect with our team. We’d be happy to share our story with you.