BiggerPockets Real Estate Podcast - I Traded My Rentals for “Passive” Real Estate (Worth It?)

Episode Date: July 21, 2025

Want passive income? We mean truly passive—no tenant phone calls, no toilets, no evictions—just checks sent to your account. This is the dream of every real estate investor, and today’s guest, Chris Lopez, actually achieved it. He did what we preach on every single episode—bought single-family rentals and small multifamily buildings and ran them right—but at some point, he realized the cash flow was too low, and the headaches were too high. So he switched, finding a type of real estate that is truly passive. At one point, Chris’s rental property portfolio was only making him a meager $20 per hour. Doesn’t sound like financial freedom, does it? He dipped his toe into passive investing, invested a little more, then a little more. Now, he’s heavily on the passive side.  Chris is on today to show you how to do the same. Got a lot of equity but low cash flow? Turn that rental into bigger, better, and more passive income. Tired of dealing with tenants but still want financial freedom? You can exchange your rentals for a passive income stream. We’re talking about debt funds, value-add syndications, and other passive investments that enable investors to earn more while doing less. Join Chris’s 5-week cohort to learn how to transition from active landlord to passive investor (while multiplying your cash flow). In This Episode We Cover Real estate investments that make double-digit returns (without the work) The one (easy) calculation every investor must perform annually  How to vet a passive investment (and the person running it) before you invest Significant economic risks to be aware of before you start passive investing  Keep, refinance, or sell? How to know your rental is past its useful period  And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1150 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

This investor found a strategy to make his real estate portfolio almost completely passive. Now he can sit back, reap the benefits, and enjoy the lifestyle of financial freedom that he wanted to achieve when he first got into real estate. Let's hear exactly how he did it. Hey everyone, I'm Dave Meyer, head of real estate investing at Bigger Pockets. I've been buying rental properties for more than 15 years, and on this show, we teach you how to achieve financial freedom through real estate investing. Today's guest on the show is investor Chris Lopez. Chris was last on the show on episode 662 in 2022,

so I wanted to catch up with him and hear how his real estate journey has progressed. And what I learned is that Chris has moved more of his portfolio into passive investing during the last few years. Almost a decade into his real estate career, he realized that the return he was getting on the time it took him to actually acquire and manage his properties was as low as $20 per hour. So Chris made big changes and redeployed his capital into passive investments that allowed him to maintain all the benefits of real estate like cash flow, tax advantages, appreciation without all the hands-on work.

I was really interested to hear how he did this and he has some great advice for how you can make a similar transition in your own portfolio if you're in a similar situation. So let's bring on Chris. Chris, welcome back to the Bigger Pockets podcast. podcast. Thanks for being here again. Dude, I'm glad to be back on the podcast and talk shop with you today, Dave. Yes, this is going to be a great time. If you guys don't know, Chris, he's been a friend and contributor to Bigger Pockets for a long time. You were on episode 662, so if you want to know more about him, go back and check that out. But for people who haven't listened to that episode, maybe let's just start at the beginning here, Chris. Tell us a little bit about why you got invested where you were at that point in your life when you started on this journey. I went to college at Virginia Tech. So go Hokies and went there for engineering and military and realized both of those were not the calling for me in life.

And like a lot of people, I read the purple book, Rich Dad, Poor Dad. And that opened my eyes to entrepreneurship and investing. And so I got extremely interested in real estate back then. And that was like 2002, 2003 time frame. So all these amazing resources went around. So I tried to get into real estate back then, just no traction. So I went down the entrepreneur. It was going to make money first.

and I learned how to invest it. And so I built a great business through the internet marketing. I thought I had achieved financial freedom because I actually graduated college from not needing a job. I was making probably like $35, $40,000 back then. Right out of college. Yeah. And I could live anywhere I wanted to. I could, I work from my Skype and Bonnage phones back then if any list remember those things.

I do. Yes. Okay, there you go. I could still hear the Skype noise that it made when you would call people. It was very distinct. Well, business income is not investment. income like real estate or stock market income, it eventually, unless you're an Apple or something eventually, like it fades away. This was 2010 time frame. The real estate market was just coming out

the great financial crisis. I'd always want to get to real estate. And I was like, dude, get back into real estate. That's the long term mouth, you know. That's not this quick day trade that's hard to do real estate. If I do for 20 years, I feel like I can become financially free. I tried wholesaling, hated that. And then I got into brokerage. And I realized that's where I really hit my groove. I was in the Denver market and I started doing like one to 40 net residential brokerage. And this really mapped with me because I'm all about how can I build wealth in the long one in real estate. I don't care about a quick buck in flipping or quick buck here. I do you make my money today. I want to build that long term wealth. And I think rental properties are, you know,

about the best way, one of the best ways build wealth in real estate. I was like, man, five, seven, 10 years. I can keep buying properties. The market does its thing and I'll get rich over 10, 20 years. And so that really set me off on my career and as well as my, you know, building a rental property portfolio as well. So let's talk about what you did because it sounds like you don't want to be reactive. So you turn to rental properties. I was investing in Denver around the same time. What year was this, by the way, when you were starting to buy? 2015. Okay. And what did you start buying? I really started focusing then since I'm more of like a finance mindset is when I bought my first property, I bought my very first house hack in two,

2011. I didn't know as a house hack. I didn't know anything. I just knew it was way cheaper than renting. So I bought a property then. And I was like, wow, I bought this place for so cheap, $67,000. And during the bubble before was trading for like $2.30, 240 price range. So I got at a you know, foreclosure, huge discount. I was going to just pay this thing off and I'll have the cash flow forever. Well, for people who are investing in Denver like you and me or other markets, we would hit this phenomenon where we'd have so much appreciation that cap rates would compress. And it's like, okay, great, I'm worth $400,000 on paper on this property, but it's cash flowing $400 a month now or it's paid off. It'll cash flow, you know, $1,500 a month, which is, you know,

really good, but, you know, I need 10 or 20 of those properties to retire I want to. Yeah. And you, that's not a particularly efficient use of $400,000. Yeah. And that's a. where you run into, and this is one of my mentors out here, he started explaining me the concept on like return on equity. He was like, look, when you buy a property, everyone talks about return on investment. Hey, you put $10,000 down, $100,000 down, whatever it is. And in year one, you make this cash on cash or your cash on cash and appreciation. You make all this here. But he's after a couple of years, you have to look at not what money you put into there, but what

equity you have in the deal, because that's your real opportunity cost. That's your real estate piggy bank. he walked me through this on my house hack I bought, which is actually I bought for zero percent down. So it's actually getting an infinite return, which was really cool to brag to my friends, really cool to talk on a podcast. Yes, you should brag to your friends about that. That's awesome. But here's the economy of it. When I was looking, when my mentors started teaching this, I had an infinite return on here, but I looked at return on equity, which is the four ways make money in real estate, appreciation, cash flow that pay down and principal reduction, divide by equity, I had $200,000 in equity. I was making like a 7 or 8% return on my equity.

So I had an infant return over here, but I also had an 8% return over here. And he was like, hey, the 8% returns the accurate one because that $200,000 is real money if you cash out, refire, sell it. And then here is the kicker. He was like, here's another way to look at it, Chris. What's the historic stock market return of the S&P 500? I was like, you know, 9, 10, 11%. He goes, yeah. He goes, you're making that property is making. making you less in the stock market and you have personal liability and you're self-managing. And you're working on it. Yeah. Exactly. I was like, oh, that hit me hard. Yeah, totally. Right. And so that was just a powerful mindset shift for me that I went through in my journey

of building rental properties and then realizing, oh, if we're an appreciating market like Denver versus, you know, a Midwest market like Ohio, where their cash flow were appreciation, I have to extract that equity and then go buy to the property. So I started doing cash out refis. I started doing sell in 1031 exchanges to go out there and redeploy the equity. And that was how I really juiced my rental portfolio and got really focused on optimizing equity in my portfolio and for all my clients in Denver back then. Chris, I think we have a lot of similarities in our real estate investing story. I learned the same lesson. And I want to be clear, it is a good problem to have. If you have too much equity in a property, that means you've probably built your net worth pretty

significantly. It's just that if you think about your rate of return, which as investors, we should be thinking about how efficiently is our capital earning us more money. That's your rate of return, right? And when you figure that out, you, like anything, there's a numerator and there's a denominator. So when you start and you think your cash flows, let's just use easy numbers here. $10,000 a year, you put $100,000 into that property. Well, your rate of return, your cash on cash return, and your return on equity at that point are all the same, right? It's 10%. But over time, that denominator, that $100,000 grows not from $100,000 to $150,000 to $200 to $300. And I'm not saying you actually put more money into that deal, but because you bought in a great place and you're in a market like Denver,

that value that you have in there is growing and growing and growing. So you have to shift your mindset and not think, oh, man, I'm still making a 10% cash on cash return. Now you're maybe, let's just say, you're making $15,000 a year in cash flow, but your equity is $300,000 a year. Your return on equity dropped from 10% to 5%. And again, this is a good problem to have, but it means that if you redeploy your capital, you could probably be making more money more efficiently. And Chris, I did this for the first six years of my investing career, too.

I had this one property built so much equity. And I was like, this is it. I'm good. I am rock solid. Nothing can touch this property. And then my sixth year of investing, I joined working at bigger pockets full time. And I was like, oh, shit. I messed this up.

Or, you know, you live and you learn. I could have done this more in a more optimized way. So I think it's a very common thing. And I love that theme. I know you talk a lot in your content about this idea of return on equity. And I totally agree. It's a much better and more important metric than cash on cash return because it really allows you to just measure efficiency, not just in real estate too, but across asset classes, like you said,

and see if you're actually finding deals that are worth not just your money, but also your time to put into it as well. All right. Well, I want to hear what you've been up to recently, Chris, but we do have to take a quick break. We'll be right back. They say real estate is passive, but if you've spent a Sunday night buried in spreadsheets, you know better. we hear it from investors all the time.

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Welcome back to the Bigger Pockets podcast. I'm here with Chris. Lopez. We've heard Chris a little bit about your story going back in time. And if you want to hear Chris's full story, again, you can check out episode 662 where he shares the full thing. But I want to talk a little bit more about how your portfolio has evolved. So you were doing these residential properties. It sounds like in the late 2010s, what's been going on since then? So I was cranked with my rental portfolio, cranking with the brokerage. And then in 2019, actually made my very first passive investment. And this was with one of my buddies. I kind of call him like, you know,

the equipment's like a gym buddy. We both kind of like grew up in real estate together. He was a very successful fix and flipping, you know, 30, 40, 50 deals a year, scaled a really good business on there. And we did a lot of collaboration. We would, you know, trade back and forth on properties and deals and clients. And then he started getting into multifamily, like a lot of fix and flippers do because it's really hard to scale a fix and flip business. Hey, rather than buying 10 single family homes, go out there and buy a 10-year-old. apartment building, and you get a lot more efficiency from operations, especially from adding value. And hey, they're all, all 10 units for the same, a lot more efficiency. So I saw him doing

that. And then he started, you know, raising a little bit of money from friends and family. And I was like, oh, I know you. I know the market. I know this deal. This is amazing. And I did my first like $25,000 investment back then. And the reason I did that was for a couple reasons. I mean, you may remember this, Dave, you know, 2019, we started seeing interest rates tick up. Yep. You know, this is all pre-COVID. And then cash flow was really getting like almost non-existent in Denver back then. Yes. It was like, okay, well, you know, I want to buy a property for a 1% cash on cash. Not too exciting. So the market had changed. And then I had my second kid coming on the way, my second daughter, my business was taking a lot of time. And so a lot of my time was spent on

my business was spent on my family with my children. And then for like, you know, my return on hassle or where I turned on sweat equity for like actively managing rentals, I was no longer getting this $100, $200, $200, an hour type return on my time. I was getting a $20 an hour return of my time. Well, if I'm making $20 an hour, I'm going to outsource it because that's viable to my family or I can make way more than $20 an hour at my profession. So I had these things changing on here. The market was shifting. I was shifting. So I was getting more. I was like, wow, I invested in here and I was making the same, if not maybe a little bit more money in a couple of these deals, and I was in buying your rental properties. So I really stopped kind of like buying rentals over

next year or two and started taking the down payment money, doing more LP syndication investments. And a couple years into that, actually started selling some of my rental properties to then move the equity from Denver rental markets where I was having a low ROE over towards passive investments where I was just getting a better rate of return. So tell us a little bit about the kinds of passive deals that you've done in the last few years. I dabble a lot, obviously. So I did a lot of small investments and a few very big investments. So a lot of like, you know, $25,000 type investments, you know, for perspective on there. And just to call out everyone, $25,000 is still a lot, but for a lot of passive investments,

for like a big deal, if you're investing in a big massive deal, sometimes the minimum requirement is $100,000. So I just want to put this in perspective that when Chris says a small deal, still a lot of money, but for a passive investment that is a small amount of money, whereas a lot of them require much more than that. Yes. And it was a small relative to a Denver down payment as well. Yeah, at that point for sure. So I did a lot of investments like that, a lot of multifamily value add, you know, typical things a lot of people did. And that's like basically people buying an apartment building and doing a burr on there. by the apartment building, Burt and a year, year and a half. It's renovated, rinse or increased by 30, 40, 50%, 50%, and you start getting some really good, you know, cash flow distributions. A lot of those investments invest in some development deals for like residential development, apartment development, a lot of debt funds. So a lot of people from with hard money lenders. Same. Hard money lenders get their money from private investors. They're not getting it from Wall Street. They get it from people like me and Dave and our 401ks a lot of times. They're not IRAs. And so they take the money and then they're lending it out to fixing flippers and people who need bridge debt. And then a lot of other just deals, but those are like the main asset classes I focus on

because I had relative knowledge on there. And also had a really good network of people that I could like find deals from that way as well. And I did some other smaller deals to just kind of like test the water and, you know, learn about it. That's great. Again, man, dude, we got to we got to hang out next time of endeavor. We've sort of done the same exact stuff. I think it makes so much sense. I'm not taking down a 20-unit multifamily property to renovate. Like, I don't have the skill set to do that. But I know it's an awesome way to make money, right? Like, you see people doing this successfully all the time, and you want to participate.

And this is an awesome way to participate with very little time. And I mean, we could talk a little bit about this. But in my experience, Chris, like, passive investing is awesome because you do a lot of upfront due diligence. You got to figure out what's good about the deal. You got to really concentrate on the operator and make sure they know what they're doing. But after that, you kind of do nothing. You just look at quarterly financial statements and make sure that you're on track. And of course, that comes with tradeoffs.

Like you don't have the same liquidity in a multifamily deal. Sometimes in debt funds, you still have liquidity. Or in funds, you have some liquidity. But that's very appealing to someone who's still doing other stuff and has other interests outside of operating a deal. So maybe, Chris, just give us an example of one deal you did that you really like. And maybe tell us, have there been any deals that have gone wrong? I got lots to talk about both.

So a deal that a couple of things I really liked. I like investing in funds, which is, you know, a syndication is usually like a single investment to an apartment building. Hey, here's a hundred unit apartment building. We need to raise $5 million for it. You invest in that. A fund will be multiple apartment buildings or multiple houses or multiple loans you lend out. So I'm a big fan of investing in funds. I'll give you two quick examples because it creates

diversification because, hey, some individual deals will be really well. A lot will do kind of towards a pro forma. And one or two usually don't go the way is planned, right? That's just investing in that's life. So I sold some Denver rentals a few years ago and invested in a value ad multifamily fund with, I mean, I think they have like 800, 900 doors in the portfolio on there. And of course, I'm a very small owner of that. But heavy concentration in the Midwest. Yeah. So I got geographic diversification.

Love that. I'm getting cash flow. And then really seeing how the Denver multifamily market is just going through its 2008 right now. Yeah. It's tough out there. Yeah. The Midwest is, you know, they're doing performing a lot better. So that fund has performed really well while, you know, a lot of Denver deals have gone south

and a lot of other, you know, multifamily deals have gone sideways. And I did a lot of investing into debt funds as well, again, a lot into like a Midwest debt fund because I wanted geographic diversification. And then they just pay out a higher debt funds are like pure cash flow. They're great. There's no principal reduction, no tax benefits. A lot of times a double-digit cash flow. And so they were paying on the higher end a lot of debt funds. That was just because they're in the Midwest where there's less competition. The Midwest is more of a rental market. And so those were two deals that I invested extremely well on. And they performed extremely well as well up to this point. At that count with my thesis of diversify away from

Denver, but really leverage my knowledge as investor to go out there and find the right investment and right operators. Well, I mean, that makes a lot of sense for me. That is one of the major things about doing passive investing that I really like, too, is that the diversification, not just in asset class, but geographically. I have syndications in places I've actually never been to, which is rare for me. When I do active out of state, I definitely go visit all those places. Absolutely. But passive, you know, if you're working with a good operator and it looks, you know, you and I both seem to be data nerds. Like, you can figure out if it's a good asset with a good operator from remote. And that's awesome because I don't have any active holdings, for example,

in the southeast, but a couple years ago when appreciation was exploding there, I wanted to invest there. And you were able to do that and diversify. And it's super cool. What about deals that have gone wrong. I'd say compared to a lot of the horror stories you hear on the internet, I've fared extremely well. I have not had any deals zero out yet. I'm not going to win on here. No, complete loss, is what I mean by zero out. Yeah. I did catch a couple like, you know, the phrase is, you know, a falling knife. Yeah. In the Denver market, when seeing started turning in late 22, early 23, you were like, oh my gosh, we're getting this apartment building at 150 a door. This is amazing. You know, he'd done a bunch of deals in his areas, you know, especially the

Denver deals where I'm having the most trouble. That's because part of the Denver market. And then also something else I put on my radar here is Colorado has had just a lot of new landlord-tenant legislation come through the last couple years. And it's made things a lot more complex. It's made operating expenses a lot higher in terms of like vacancy and, you know, how you do evictions and things like that, how you can collect some fees. And so the combination of the market going south and then the legislative headwinds, really was like a double, you know, one-two punch on there. And so I've had a couple deals where distributions are paused. Yeah. But luckily, and this goes back to like, you know, leveraging the

network of the knowledge is I underwrite the operators the most because I'm, I'm trusting that person with my capital. And they are really good operators in terms like how they underwrite. Like their SOBs when comes to negotiating, which is good. They're wealthy themselves. So if things go sideways, they can feed the deal some themselves as well. And so, you know, hey, some deals have paused. And luckily, they've put good debt on there. And probably just hopefully the plans just write out the store for next two or three years as a mark comes back, sell at probably, you know, principal or maybe a little bit of a loss, a little of a gain. But we're positioned where we can write out the storm on those, which I've been very, very fortunate with. To be clear, like, we're also going

through a market cycle where multifamily, where a lot of syndications are concentrated, is getting crushed. I mean, like, nationally, prices are down 15 to 20 percent. Some markets are even worse. Some markets are fine. But, you know, syndications have gotten a bad rap, I think, because the whole asset class is suffering and people bought at inopportune times. Not that the deal structure of a syndication. Remember, syndication is just a deal structure. It's not a particular deal or a particular asset class. Syndications themselves, I don't think, are the problem. It's that the operators bought at bad times. You know, like, so there might be a bad operator.

It might be adverse macro conditions. But for me, at least, I don't think it's the fault of the deal structure and that it was the fact that it was a syndication. You just bought the wrong asset at the wrong time. Man, they're starting to meet some really good opportunities in both worlds out there now. Oh, I agree. What I like about the passive side now is like the operators that, you know, just they underwrote deals poorly or couldn't, they just weren't good operators.

Those guys are washed out now. Yeah. The people who are still doing deals, they're the people usually good operators. Of course, always do your due diligence. Look at their trackwork and all that stuff. Like, I'm not giving investment advice here. But like, it's weeded out a lot like the subpar operators. And now I think like there's great buying opportunities in both like, you know, active residential and both in commercial active and both like commercial passive type deals. So I'm like really excited right now. Like the, you know, there's pain. But like there's lots of opportunity coming down the pipeline.

I think it's only going to get better for the next couple of months. But I'm starting to see good deals for sure. I'm revving up. I just sold some property, too, to go buy more stuff because I think there's going to be better deals out there. Anyway, I digress. I want to turn the conversation to just like how people can do this. Because I think this transition from active investor like you were doing, and I still do, to passive, like, how do you make that transition successfully? Because I think a lot of people want to do this.

Let's get into that. But we've got to take one more quick break. We'll be right back. So if you are an experienced investor, considering more passive investing options, Chris is going to lead a five-week live cohort to help you navigate the transition from landlord to limited partner. Anyone who joins the cohort will get access to two weekly live Zoom sessions starting July 28th. You'll also get a free 90-day passive pockets trial, access to portfolio analysis software, and more. If you want to run a full diagnostic on your current portfolio,

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Welcome back to the Bigger Pockets podcast. I'm here with investor Chris Lopez. We're talking about how Chris has gone from being an active investor building his own portfolio in Denver. to taking a more passive approach. And Chris, I want to talk about how our audience can follow a similar path if they want to. Like we said, there's points of divergence in your investing career. Some people choose to go all in and become an operator. Some people just stay with the slow and steady approach that they've always done.

But I think a lot of people are interested in this passive approach. So how do you recommend people make this transition? Measure twice, or probably measure like twice, you know, like be very intentional. be very data-driven. Going back to portfolio review, my framework is I load every property into a spreadsheet or software, and I go through and say, hey, what's return equity? And then I run through three options. You can keep the property, which means keep it as is, optimize it, pivot to an Airbnb or now, you know, room by room living or co-living is a hot strategy right now for cash flow. Hey, can I convert the property or keep it as is? Second option is, can I do like

cash out refinance. Can I extract the equity and then go use that cash I pulled out to invest elsewhere? The third option is you can sell the property to extract the equity and then go invest a lot. And I use always, you know, sell in 1031 exchange, right? So I get the tax benefits of 1031 exchange where I get defer my taxes, defer my appreciation or capture and go buy new asset. So you can sell and you can either do 1031 exchange or you can also just sell, pay taxes, and invest elsewhere. So if people go through and they look at their portfolio and for each property, they go through and look at these three options and then they look at their goals, it gives you an amazing, here is where I am presently. And then you can look at the investment opportunities

you have in your market, partnerships outside the market, you know, stocks, DST, syndications, other rental properties. You can go out there and say, hey, I'm sitting here. What can I start doing? And I always tell people do a lot of what ifs and just play it out. And, you know, the great thing about real estate is you don't have to make all these decisions and transactions in 30 days, right? Map it out. And then if you got the worst performing property and it's the biggest headache, maybe just sell that in reposition. Sell in 1031 exchange or sell and invest in a syndication or sell and invest in the stock market and just, you know, make one or two moves a year and over, you know, a five, seven year time frame rebalance your portfolio. And I still own active

rentals. And I'm a big believer, hey, I want to have both and I like both. We talk about this a lot on the show these days. It's like, I know there's this edict in real estate. People a lot of say, like, never sell. I think that's absolutely crazy. Like, why would you do that? Why would you hold on to something that's not performing as well as other assets probably could? I think a lot of people just don't want to go through the exercise that you just talked about, which is like, you got to go and do the work, and it's not a ton of work. I have spreadsheets that are associated with my book that you can check out. I'm sure Chris has spreadsheets too.

Like, there are ways that you can do this. It's not that complicated. You just have to put in a little bit of work to be able to go through and do this. But I think one of the big things that hold people up on passive investing, Chris, is just the idea of where do you find the deals, where do you find the operators, and how do you vet them? So can you just give us a brief idea of, like, how people can go about that? So, you know, two main ways I look at is your personal network as investor. A lot of times have networks.

So go out there and network with your investors, your professionals, everyone out there, see what deals you're doing. Other things are like platforms like passive pockets. About a year ago, bigger pockets acquire passive pockets. And I'm very plugged in that community. I do some podcast over there as well. You take the resources that like bigger pockets has for active investing. They have that for passive investing.

And they also have a deal room too where we're going to see actually sponsors on there. They present their materials. And a lot of times you also have community reviews, community feedback other investors underwriting. And sometimes investors have invested in previous deals with them and give you real feedback. Yeah. Hey, this investor was great or this guy, red flag, red flag, never invested with him again. So I'm a big fan of passive pockets as an amazing resource looking at deals and learning that game.

Yeah. I mean, this is such a valuable thing because I've found in my own transition that being around other people who do syndications is super helpful. Like getting advice from someone who's super active, you know, who's an operator on syndications or on debt funds, it's not really that helpful. You want to sort to build a community of people who are doing like-minded things, which is why we started passive pockets. It's a great free resource to that podcast that Chris is on. We also have our own forums and stuff there that you can check out there as too. So that's really good advice. What about sort of like the skills that you need? Because you still need to underwrite these deals and they might be a little bit more

complicated than buying a single family or just like a duplex. Yeah, I mean, I would say for active investors out there, you probably got like 80 to 90% of skills you need to underwrite it because I mean, as an active investor, like you know how to do rent comps. You can look at performance and be like, hey, a 10% increase in rents every year is BS. So you have a lot of skills on there. And you have to fill in that like remaining 20% with understanding the legal structure and also understanding how to underwrite the operator because it's like investing in Apple or a company in stock market, right? When I invest in Apple, Tim Cook does not care about my opinion. And I have no influence over Tim Cook. And when I invest in syndication, that operator, hey, at least they'll take my phone call usually,

like Tim Cook. But I don't have control and no input. So I am completely hands off. So it's really learning how to do the legal stuff and underwriting the operator like the two new skills act investors have to learn. And one of the resource. So, I've gone through transition myself. That helps with my clients here in Denver. So a really exciting program that I get to kick off that's kind of a joint venture between bigger pockets and passive pockets is a five-week active to passive cohort. So it takes through a lot of the methodical steps we talked about on the podcast today. Over five weeks, we go through and review people's portfolios, your goals, learn the basics of underwriting passive and it deals.

We spend a whole week on just tax-advanted strategies from active-to-passive, because, because you typically can't do a 1031 exchange, let's run like a million dollar plus check, just the way things are structured, you can't do it. So we go through very methodically how you can go out and look at your portfolio, learn active investing, and either make your first investment or maybe start transitioning some of your rental properties

and create a game plan for it. It does kick off July 28th. So it's coming around the corner, but I am super excited to kick it off and would love to have everyone on there come join us. Dude, that is awesome. That is really, really valid. I get this question all the time, people who want to make this transition.

So if you want to check that out, Chris, where did they go? So biggerpockets.com forward slash transition. We'll take it to the course page, view all the details there, and you can reserve your spot and come join us for our July 28th kickoff. So anyone who wants to learn how to do this successfully, obviously, as we've heard over the course of this episode, Chris is an expert in this and will be a great teacher to help guide you through the transition from active to passive investing. I wish I had this kind of help while I was trying to figure this out a couple of years ago.

Chris, good luck with the cohort. Sounds like an awesome program. And thanks so much for being here. This was a lot of fun having you. And thanks for sharing your story. My pleasure. Thank you so much, Dave. And thank you all so much for listening to this episode of the Bigger Pockets podcast.

We'll see you all next time. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand-new construction homes, 10% below market value, and the best markets across the country, without making real estate your second job? That's exactly what rent-to-retirement does.

They're a full-service, turnkey investment company, handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with bigger pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit biggerpockets.com slash retirement to learn more.