Once someone decides they want to invest passively in real estate, the very next question is almost always "okay, but with what money?" It's a fair question, and the answer is usually broader than people expect.
Cash Savings
The most straightforward source, and the one that requires no extra paperwork — you commit capital directly from savings or a brokerage account when a deal opens.
A Self-Directed IRA
Most people don't realize a standard IRA can be converted into a self-directed IRA that's allowed to hold real estate investments, not just stocks and mutual funds. It's a genuinely underused tool for building real estate exposure inside an account that's already tax-advantaged. If this is new to you, our partner site REL Freedom has a full free guide, "Using Your IRA To Invest In Real Estate," worth reading before you talk to a custodian.
A 401(k) Rollover
If you have an old 401(k) sitting with a former employer, it can often be rolled into a self-directed IRA or solo 401(k) structure that allows real estate investment — again, without necessarily triggering a taxable event if it's done correctly. This is a conversation worth having with a qualified custodian or CPA, not something to DIY based on a blog post, but it's a real and common path for our investors.
HELOC Or Other Leveraged Capital
Some investors tap a home equity line of credit or other existing leverage to fund a passive investment. This carries more risk than investing straight cash, since you're adding debt on top of the investment's own risk — it's worth being conservative here and understanding both sets of obligations clearly.
The Common Thread
Whatever the source, the same underwriting standard applies on our end regardless of how you fund your commitment — see Our Criteria for exactly what has to be true about a deal before we'll bring it to investors. The right question isn't just "what money can I use," it's "what money can I use that I can afford to have illiquid for 3–5 years while it works" — see Strategy & Process for our typical timeline.
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