What “Passive Income” Really Means (And What It Doesn’t)
If you spend enough time in commercial real estate circles, you’ll hear the phrase passive investing so often it starts to sound like a hammock and a margarita should come with it!!
Let me reassure you: there is nothing passive about the people behind truly passive income.
I learned that early.
When I first started studying real estate, I assumed—like most people—that “passive” meant hands-off, easy, and pleasantly uneventful. The truth is more nuanced. Passive investing isn’t about doing nothing. It’s about doing the right things up front so the investment works for you over time.
It’s less hammock, more discipline.
Less margarita, more due diligence.
But it’s worth every bit of it.
Becoming an LP: My First Step Into Passive Investing
This was my personal experience, and every investor’s situation, goals, and risk tolerance are different.
A front-row seat to how wealth is actually built.
As an LP, you’re not managing the property. You’re not signing on the loan. You’re not handling contractors, operations, or emergencies. You are, however, responsible for choosing the people who do.
And that part is anything but passive.
I realized quickly that the quality of your experience (and your returns) depends entirely on one thing:
the operator you choose.
It doesn’t matter how beautiful the property looks in photos or how compelling the business plan sounds. In real estate, execution is everything—and execution lives and dies with the operator.
The Illusion of “Easy”
Most people never invest in real estate because they assume:
It’s complicated.
It’s risky.
It’s “for wealthy people.”
It requires day-to-day involvement they don’t have time for.
And while those misconceptions are common, they’re not accurate.
Passive investing is designed for people who:
have full-time careers
want to grow wealth without sacrificing stability
value leveraged expertise
prefer long-term strategy over short-term chaos
Sound familiar? It did for me.
In fact, it aligned perfectly with how I spent three decades operating in healthcare—strategic, structured, disciplined, and built for the long game.
So What Does Passive Investing Actually Look Like?
Here’s the truth: passive investing has two stages.
Stage 1: Active Work (yes, active)
This is the part most people skip or rush through:
Vetting the operator
Researching their experience
Understanding their process
Reviewing the deal’s fundamentals
Asking the questions that reveal their discipline and alignment
This stage doesn’t last long, but it matters.
It’s the part where you protect your capital and your peace of mind.
Stage 2: Passive Return (the part everyone talks about)
Once the operator proves themselves and you invest in the right deal:
You don’t manage repairs
You don’t deal with tenants
You don’t run numbers at midnight
You don’t negotiate with lenders
You don’t oversee construction or operations
The operator does.
You receive updates.
You participate in the economic outcomes of the investment.
And you stay focused on your career, your family, and your priorities.
Passive investing exists so your money can work harder than you do—without requiring you to change the life you already built.
Why This Was a Turning Point in My Journey
When I invested as an LP for the first time, something shifted.
I realized that for nearly three decades, I had been building companies… not assets. I had been operating systems… not ownership. Passive investing introduced me to a truth I wish more people understood:
You don’t have to choose between career stability and wealth creation.
You can choose both.
Real estate didn’t pull me away from healthcare—it gave me a bridge to build financial security beyond my career. It gave me a way to create generational opportunity without abandoning the work I love.
And once I saw that clearly, I wondered why more people weren’t doing the same.
The Next Question That Changes Everything
If passive investing depends on the operator, then the natural next question is:
How do you know you’ve found a good one?
Because trust is not a strategy. And “they seem nice” is not due diligence.
I’ll share the questions I learned to ask—and the red flags I learned to recognize…the quality of your experience (and your returns) depends entirely on one thing: the operator you choose.
That’ll be coming up in my next post.......
This article is for informational and educational purposes only and does not constitute investment advice or a solicitation of any investment. Individual circumstances vary, and readers should consult their own advisors before making investment decisions.
