What kind of returns can a passive multifamily real estate investor expect? What if you could double your money in just five or six years? And pay little or nothing in the way of taxes?
Jan Larson spent 25 years in the high-stress world of semiconductor development, most recently working for Amazon. He had always been interested in real estate investing but did not want to deal with 3AM phone calls about clogged toilets. Five years ago, a colleague introduced him to a passive investing opportunity, and Jan was hooked. Today, he has invested in 28 multifamily deals involving 34 properties, and in January, Jan had enough passive income to quit his job.
On this episode, Jan joins me to discuss how his life has changed since he quit his job through passive investing in multifamily. He explains how living through the stock market meltdowns in 2000 and 2008 inspired him to diversify with apartment buildings, describing what he loves most about multifamily and sharing the returns passive investors can expect. Listen in for Jan’s advice on how to get started with passive investing and learn how he evaluates deals based on the sponsor and the submarket!
Key Takeaways
How Jan’s life has changed since he quit his job
- High-pressure work in tech industry
- Much less stress now
How Jan got started with passive investing
- Introduced to multifamily by colleague
- Steady deal flow snowball from there
Why Jan chose real estate over the stock market
- Lived through meltdown of 2000 + 2008
- Diversify to reduce exposure to market
What Jan loves about passive investing in multifamily
- Not binary
- ‘Set it and forget it’
What allowed Jan to invest in 28 deals in 5 years
- Liquidated stock investments and Roth IRA
- Rolled proceeds of sales into other deals
How refinancing a property benefits passive investors
- % of investment returned (redeploy in new deal)
- Cash-on-cash return of remaining = 25-30%/year
The returns a passive investor can reasonably expect
- 8-10% cash-on-cash returns
- Double money in 5 or 6 years
Jan’s insight around the tax benefits of multifamily
- Depreciate faster with cost segregation
- Haven’t paid any taxes on CoC returns
What Jan looks for in a multifamily deal
- Trustworthy sponsor with track record
- Submarket in particular + overall market
Jan’s advice for aspiring passive investors
- Find Meetups to meet sponsors
- Vet by talking to other investors
Jan’s top takeaway for potential passive investors
- Multifamily investing gives options
Connect with Jan
Email [email protected]
Resources
What’s the Best Investment: The Stock Market or Real Estate?
