440: Why ROE Beats ROI, and How to Earn Truly “Passive” Income from Real Estate

As an investor, it’s easy to become fixated on cash flow , much like today’s guest at the start of his real estate journey. After realizing he was “ house poor ” with a mortgage payment larger than he could afford, Eric Garber stumbled upon house hacking . He rented out his basement and used the extra money to pay off his house early . With proof of concept for his newfound house hacking strategy and income from a stable W2 job , everything was going great. Then Eric’s world came crashing down when his marriage ended and his employer froze his pension plan . Without a prenuptial agreement , his financial fate was left to the state court system . Losing more than half of the assets he had worked tirelessly to grow, Eric found himself back at square one. This time, he was going to do things differently. Rather than pouring his time, energy, and money into paying off his real estate and living off the cash flow , Eric realized the opportunity that could be had by accessing his equity and putting it to work —a revelation that will allow him to retire early , despite the curveballs life has thrown his way. If you think getting a prenup is “planning for divorce,” you’ll want to hear what Eric has to share in this episode of the BiggerPockets Money podcast. Beyond offering practical financial tips you can put into practice before getting married , he talks about the paradigm shift that allowed him to unlock wealth. He also discusses the investing strategy that allows him to earn truly “passive” income — syndication deals ! In This Episode We Cover Why you NEED a prenuptial agreement to protect your financial future One of the most “passive” ways to invest in real estate Weathering economic downturns by diversifying your investment portfolio How to do your homework when analyzing a syndication deal Key financial tips to consider before you get married And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Scott's Instagram Mindy on BiggerPockets Grab Scott’s Book, “Set for Life” Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Listen to The Real Estate InvestHER Show Join The Real Estate InvestHER Community on Facebook Register for an Upcoming InvestHER Event Money Moment Why You’re (Probably) Wrong About Prenups ROE over ROI and Why Your “Cash Flow” Number Is Deceiving Syndications: Everything You Need to Know BEFORE You Invest Click here to check the full show notes: https://www.biggerpockets.com/blog/money-440 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: moneymoment@biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices