Lake Norman NC Real Estate – To be an Active or Passive Investor?

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Many investors are disheartened by Lake Norman NC real estate because they don’t have the time to become landlords and property managers, both of which are careers in themselves. If the investors are by chance a rehabber or wholesaler, Lake Norman NC real estate becomes less of an investments and becomes more of a business. Many successful property investors are in fact real estate operators in the Lake Norman NC real estate business scene. On the bright side, there are a lot of other options for passive investors to benefit from the guarantee and inflation proof benefits of Lake Norman NC real estate investing without any of the hassle.

An active Lake Norman NC real estate investor has many advantages. Middlemen fees charged by property managers, brokers, asset managers, or syndicators are avoidable. Moreover, an active investor will have the opportunity to make all the decisions. The investor takes the whole responsibility for his/her decision, for better or for worse. The active, direct investors can also make the decision to sell whenever or whatever he/she wants out, assuming that a market exists for his/her property at a fair price to pay off all liens and encumbrances.

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Offering many advantages of its own, passive investment in lake norman realtors is the flip side of the coin. Property assets or mortgages are handled personally by professional real estate investments managers who spend their time analyzing and managing any real estate properties. Usually, these experts can negotiate lower prices that you would not be able to achieve on your own. Also, if ever an investor’s cash is pooled, the passive investor is entitled to own a portion of the property for a larger, safer, more profitable, and of a better investment category compared to the active investor who goes by with smaller capital.

A huge number of lake norman realtors is bought with a mortgage note for a large portion of the purchase price. Even though the use of leverage has its advantages, the individual investor would more likely have to personally guarantee the note, thus putting his/her other assets at risk. The limited owner of shares in a Real Estate Investment Trust would have no responsibility in the exposure over the amount of the original investment as a passive investor.

The active Lake Norman NC real estate investor is more or less likely not able to expand his/her portfolio of properties. Having ownership of only about 2 to 4 properties, the investor’s capital can easily be put at risk or wiped out by one problem of any one of his/her properties. On the other hand, the passive Lake Norman NC real estate investors would more or less own a small shares of a huge diversified portfolio of properties, therefore reducing his or her risk by a significant amount through diversification. With portfolios or 20 to 30 or more properties, the problems of any one of two will not significantly trouble the performance of the portfolio as a whole.

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