Active vs Passive Real Estate Investing

Active vs Passive Real Estate Investing

Are you interested in real estate investing but don’t know where to start? Read on about the differences between active vs passive real estate investing and how you can take action to learn more.

Active Real Estate Investing: Get Your Hands Dirty

When people think about investing in real estate, they might think of the various HGTV shows out today. Viewers can get a healthy binge of fixing and flipping programs, from the coastlines of California to the suburbs of Georgia.

These shows are tremendously popular, but might lead viewers to an idea that it’s simply a matter of finding a fixer, doing some renovations, making the sale, and then receiving a profit.
But if it was only as easy as they make it seem.

These shows have entertainment value. But what viewers don’t see are the countless hours the hosts spent learning about real estate and the mistakes they made over the course of their careers.

Fix and Flip Opportunities

Many real estate investors who make a career out of fixing and flipping can tell you horror stories.
Some have lost everything at one point. Unexpected issues such as misunderstood zoning laws, hidden and unforeseen damages, or a bad contractor, can destroy what in the beginning looked like a great deal.

That’s because there is a high degree of complexity to find, fix, and flip properties.

In order to be truly profitable, you have to start with a great deal. Investors need to understand the After Repair Value (ARV) of the property and what it will cost to renovate, market, and sell. Crunch the numbers and plan for contingencies. Flips are only profitable when the numbers make sense.

active vs passive real estate investing
They key to a profitable fix and flip starts with a great deal.

Tenants and Toilets

To buy and hold property and rent it out, has its own set of problems. A tenant can fall on hard times, miss rent payments, and leave the owner on the hook for the mortgage payment and repairs.
One landlord I know had a model tenant for years. But when that tenant went through a nasty divorce, he caused thousands of dollars in damage to the property, punching holes in the drywall throughout the house. Another property owner evicted a tenant only to have all the appliances stolen out of her rental. There is story after story you might hear about bad renters.
It can cost property owners thousands of dollars in evicting a tenant and repairing the property. These are all costs absorbed by the property owner.

Hands on Management

All horror stories aside, traditional hands on real estate investing, whether it’s flipping a property or holding a property for rental income, is still amazingly profitable for many investors.
The point being its “hands on”.  As an investor you are actively involved in the process of managing the buying, fixing, renting or selling processes. For successful real estate investors this can be a full time job.  And is just one side of the active vs passive real estate investing discussion.

Passive Real Estate Investing

What’s not to love about the idea of passive investing?
Basically you invest your money, without the need for a lot of management.
Now there’s a lot of different passive real estate investment opportunities. Many that even seasoned investors might be unaware of, including:

  • Notes or Trust Deeds
  • Brokering—lending money to other investors
  • Real estate investment funds (REIT)
  • Reg A+ funds (like the Circle of Wealth Fund III LLC)
  • Buying raw land and holding it for future sale
  • Rental property (passive when you hire a company to manage the property)

Even with a passive investing model, you can’t just put your feet up. An investor needs to learn and understand what these real estate investment niches entail.
Each of these different facets of real estate investing are diverse and have their own complexity.

But once you get over the learning curve and work with people you can trust, you can achieve a tremendous amount of freedom and the ability to put your money to work.
learn about active vs passive real estate investing opportunities
If only it was as easy.  The truth—you’ve got to learn before you can earn.

Education is Essential

Did you know you can purchase a note on a property, hold that note and draw interest off of it for a specific period of time? No? Now’s a great time to learn.
One great resource to begin your learning journey is YouTube. There are numerous videos on these topics that will allow you to dip your toes in the water to understand available options.
But a word of caution…
Never take information from others at face value. Always vet the information you receive to make sure you are getting the “whole story”.

Always Trust But Verify

The real estate investment niche is full of people that would love to take your money. Like any investment, real estate is subject to risk. So before jumping into the ring with passive real estate investing, make a commitment to learning.

Who Can You Trust?

One of the quickest paths to getting up to speed on passive real estate investing is finding someone you can trust. Look for a well established company or individual that has extensive experience in the industry.

There are many companies out there that provide training and mentorship for you to understand passive real estate investing. Many of these even have vehicles to allow you to take advantage of returns on real estate. Usually experienced managers run these investments, such as is the case with Secured Investment Corp.’s, Circle of Wealth Fund III.

Find Your Opportunities for Financial Growth

Whether it is either active vs passive real estate investing that interests you, you’ll first need to understand what are “your” dreams for the future. How much are you willing (or not willing) to take on? These aren’t questions others can answer—only you. But through education and sound mentorship, investors can open up a world of possibilities to make those dreams come true.

You can learn more about real estate investing by attending one of our FREE webinars. The Lee Arnold System of Real Estate offers classes and mentorship on many of the passive investing models mentioned above. To attend a webinar, click the button below or call 1-800-341-9918.

Schedule Your Free WebinAR tODAY >>


Earning and Income statements made by our company and its customers are supplied directly from the company or customer. Any and all claims or representations as to income earnings made on our web sites or in our materials or information are not to be considered as average earnings. There is no guarantee that you will make these levels of income — in fact, most people do not — and you accept the risk that the earnings and income statements differ by individual. Individual performance depends upon each customer’s unique skills, time commitment and effort. Our programs are not designed or intended to qualify individuals for employment. Our programs are avocational in nature and are intended for the purpose of the personal enrichment, development, and enjoyment of individuals.

Past performance is not an indicator of any future results. All investments contain risk and may lose value. Any historical returns, target returns, expected returns or probability projections may not reflect actual future performance. Investors should not rely on forward-looking statements because such statements are inherently uncertain and involve risks. While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of data provided by investors or other third parties. We do not make any representations as to the accuracy or completeness of the information contained on this website and undertake no obligation to update the information. Neither Secured Investment Corp. nor any of its affiliates are registered investment advisors or broker-dealers and do not provide investment advice. No communication from Secured Investment Corp. or its affiliates through this website or any other materials is intended to be or should be construed as investment, tax, financial, accounting or legal advice.


Secured Investment High Yield Fund II, LLC is open to “accredited investors” only, through an offering made in accordance with Regulation D, Rule 506(c) of the Securities Act of 1933, as amended. In purchasing securities through a 506(c) offering, we are obligated to verify any participating investor’s status as an “accredited investor” in accordance with Rule 501 of Regulation D.

Circle of Wealth Fund III LLC has filed offering circulars and may make additional filings with the Securities and Exchange Commission covering its current offering of membership interests. Each investor should carefully consider the risk factors and other information discussed in the qualified offering circulars (including any amendments) before purchasing membership interests. The Offering Circular and other supporting documentation may be found at:


NMLS #160709 • Please click here for the Secured Investment Corp NMLS Consumer Access Page

Secured Investment Corp and its members, officers, directors, owners,  employees, agents, representatives, suppliers and service providers provides this website for informational purposes only. By using this site, you are subject to our Terms of Use and our Privacy PolicyPlease read these carefully before proceeding. In exchange for using the site, you agree not to hold Secured Investment Corp, our affiliates or any third party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through this site.

Neither Secured Investment Corp. nor any of its affiliates are registered investment advisors or broker-dealers, nor do they provide tax or financial advice and do not represent in any manner that the outcomes described herein will result in any particular tax or financial consequence.

The information on this website does not constitute an offer to sell the membership interests identified herein in any state or jurisdiction in which the issuer is not qualified to do so.


All investments contain risk and may lose value, and any investment with Secured Investment Corp is considered speculative. There are no guarantees of distributions or returns, and an investor may lose all or a part of their investment. Past performance is no guarantee of results, and any historical returns, target returns, expected returns, disclosed rates of return, disclosed earnings statements, or probability projections may not reflect actual future performance. Investors should not rely on forward-looking statements because such statements are inherently uncertain and involve risks. Any reliance on figures presented is done so at the investor’s own risk. Secured Investment Corp cannot guarantee that investors will achieve similar returns as prior investors.

Secured Investment Corp encourages investors to invest carefully. All investors are advised to fully understand all risk associated with any investment the investor may choose to make. Accordingly, you should consult with your own attorneys, accountants, and other professional advisors prior to making an investment. The Fund files audited annual and unaudited semiannual financial reports which are available for review here.

Circle of Wealth Fund III LLC has filed offering circulars and may additionally post-qualification amendments (including supplements to such filings) with the Securities and Exchange Commission (the “SEC”) covering the current offering of membership interests. An investment in membership interests entails risk of loss, and you may lose all or part of your investment. Each investor should carefully consider the risk factors and other information discussed in the qualified offering circulars/PQAs (and current supplements, if any) before purchasing membership interests. For more information on the Risk Factors and Cautionary Notes of investing with Circle of Wealth Fund III LLC, please click here:

Offerings by Circle of Wealth Fund III LLC: The Offering Circular is available here:

Generally, no sale may be made to you in this Offering if the aggregate purchase price you pay is more than Ten Percent (10%) of the greater of your annual income or net worth. Different rules apply to accredited investors and non-natural persons. Before making any representation that your investment does not exceed applicable thresholds, Investors are encouraged to review rule 251(d)(2)(i)(c) of Regulation A. For general information on investing, Investors are encouraged to refer to

A copy of these materials may also be obtained for free on the SEC’s website at:

The information above presents a general summary of the business and the purpose and principal business terms of an investment in the Company. This summary does not purport to be complete and is qualified in its entirety by reference to the more detailed discussion contained in the Offering Circular.

Photos of real estate assets depicted are not part of this offering. These are representations of past transactions conducted and underwritten by the Secured Investment Corp. management team. These transactions are representative of the types of transactions and assets that the Fund will be participating in.

Articles or information from third-party sources outside of this domain may discuss Manager and/or Company (or its affiliates) or relate to information contained herein, but Manager and/or Company and its affiliates do not approve and are not responsible for such content, nor does Company make any representations as to the accuracy or completeness of the information contained on third-party websites. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by Manager and/or Company or any of its affiliates of the linked or reproduced content.

Neither the SEC nor any state securities commission or regulatory authority approved, disapproved, endorsed, or recommended the merits of the offering described in the Offering Circular or reflected on this website.

Manager’s and/or Company’s services do not constitute “crowdfunding” as described in Title III of the Footer 3e Jumpstart Our Business Startups Act (“JOBS Act”).