If you’ve been looking to make passive investments in hard assets but are finding it difficult to get the returns you’d expect, there are other great vehicles that can generate 10 % or higher with conservative risk. Business loans made to well-run, established and profitable businesses that are not served by traditional banks or other sources can provide an attractive risk adjusted yield. Jamie Shulman founded Meriwether Capital with the purpose of providing short-term financing up to $5 million to businesses with $2 million to $50 million in total revenues. Jamie raises capital from investors and provides a steady 10% return.

The best ideas are simple. For example, creating a national coffee chain like Starbucks, or an alternative to taxis, like Uber, or Airbnb, etc. Joseph Woodbury, CEO of Neighbor.com, connects homeowners and businesses that have unused space to people who need to store cars or other storage items. Now people can find homeowners in their town where they can park their car, boat or RV. Neighbor.com has also created partnerships with office buildings, parking garages, and apartment complexes where renters can store their goods. There are currently more storage facilities in the country than all fast-food locations combined. 

Starting a Multifamily brokerage from scratch can be a steep undertaking. It takes time to build awareness, and to get known in a market in order to hire the right agents and obtain property listings and clients. As the current environment is seeing agents leave the market, however, there’s opportunity to gain traction in starting a brokerage business. By adhering to basic sales and marketing disciplines, and providing superior customer service, there’s room for a hungry, newer player. Rob Rixer, Founder of Citypoint and author of Forced Appreciation, has opened an office in suburban Chicago and Scottsdale, AZ, and will be opening in South Florida later this year.

Despite the desire for short-term gains, the predicable wealth in Real Estate is built over the long term with quality assets and strong operators. In multifamily markets where employment and population trends are favorable, rents will continue to grow and the value of properties will increase substantially, especially in supply-constrained markets. Keith Wasserman, co-founder of Gelt Inc., buys properties with mostly 7-10 year fixed debt in western markets. Keith has amassed a portfolio of 5,000 units and has provided exemplary annual returns for his investors of over 20%. Kieth has also conducted many 1031 exchanges so investors can reinvest their money without immediate tax consequences.

Single family homes in the U.S. are the largest asset class in the world at $37 trillion dollars. This is why the largest financial institutions on Wall Street have been increasing their investments in this lucrative asset class. There are many ways to make money in single families from flipping, to buying and holding, to lending against them. Jim Manning, CEO of Doorway Properties, started out fix and flipping in his hometown of St Louis and is now specializing in lease purchases where tenants make payments toward the purchase of the properties. Jim has funds of these properties that have generated safe, consistent, passive returns for investors with conservative leverage.

In an environment where it’s difficult to achieve significant cash flow with direct equity investments in Real Estate, investing in the debt can be an attractive option with much more liquidity.  Investing in debt can have less risk and generate yields as high as 9%-11%, and sometimes even higher, with the assets as collateral. Carrie Cook, President of Ignite Funding, makes investing in Real Estate available to people who always wanted to invest, but didn’t think they could afford it, in addition to seasoned investors seeking a high yield on their money.. Through Ignite Funding, individuals can invest in loans against specific Real Estate properties in different asset classes for as little as $10,000.

Most of the problems in commercial Real Estate right now are related to debt. In addition to evaluating the General Partner, debt is the most important aspect of a deal. James Eng, “The Professor” of multifamily financing, is the National Director at Old Capital in Dallas. James has helped hundreds of multifamily investors strategize the right debt to obtain and acquire over $1 Billion dollars of properties. James has also been a Limited Partner investor in 45 multifamily deals in Texas. James shares valuable information on the current market and his experience on how he vets sponsors and deals that he invests in.

Making money in Real Estate requires timing and being able to see what others don’t. Just a few years ago, retail was written off for dead because of e-commerce and Amazon. More recently, office has become a hated asset class because of the work-from-home trend and the problems of urban cores and central business districts across the country. Neighborhood retail, however, has the highest occupancy rates of all time, and select Class A suburban office is doing very well in the right locations. Dennis Cisterna, Co-founder and Chief Investment Officer of Sentinel Net Lease, is acquiring great, single tenant NNN suburban office buildings, retail and industrial properties at attractive prices in his latest fund offering.

Both residential and commercial Real Estate occupancy rates and rents are contracting in many markets in combination with higher expenses. When investing in the right part of the cycle, however, Real Estate can generate attractive cash flow. Aside from Real Estate, there are other great cash-flowing businesses that can scale efficiently and generate consistent, high double-digit returns. Justin Sloan, a successful Real Estate entrepreneur and President of Sloan Capital, is also deploying capital into non-Real Estate, cash flowing, debt- free assets. Justin recently bought the franchise rights to Ever Bowl in Texas and Iowa, a successful smoothie franchise. 

Real Estate is a block-to-block business where an intimate lack of local knowledge can be costly. It’s critical to know the nuances of a submarket and the different neighborhoods to mitigate risk. Eddie Ring, Founder and CEO of New Standard Equities, only buys in markets he knows like the back of his hand. Eddie specializes in value-add multifamily on the West Coast and has generated 29% IRR’s and equity multiples of 2.6 over three to five years hold periods. Eddie sticks with what he knows, as opposed to exploring other markets, and has generated incredible returns for his investors.