What Kind of Passive Income Do You Really Want? (And Why I Still Love Ugly Rentals)

What Kind of Passive Income Do You Really Want? (And Why I Still Love Ugly Rentals)

You know what I’ve learned after 22 years in this game?

Most people are chasing this magical idea called “passive income”—but they never stop to ask what kind of passive income actually fits their life. They hear the word “passive” and think it means money rolling in while they sip piña coladas. And sure, that sounds nice. But the truth is, passive income comes in different flavors—and not all of them are built the same.

Let’s break it down.

The Safety-First Crowd: CDs and REITs

If your number one priority is no stress and no risk, then a 5% CD that’s FDIC insured might honestly be your best friend. It’s boring. It won’t make you rich. But it’s reliable. It’s the financial version of a warm blanket—safe, predictable, and zero drama.

You lock up your money for a period of time, and in return, you get a guaranteed return. No tenants. No maintenance. No late-night phone calls. Just peace.

A REIT (Real Estate Investment Trust) is another option for the safety-minded crowd. You buy it like a stock, sit back, and let the fund do its thing. You get a little piece of a big real estate portfolio without ever owning property yourself. Sounds passive, right?

Sure, but keep in mind: you don’t own the real estate. You don’t control the asset. And when the market swings, your REIT swings with it. It’s still passive, but not risk-free—and definitely not personal. Plus, good luck getting any equity out of it.

The Hype Trap: Crowdfunding

Then there’s real estate crowdfunding. It sounds great in theory: pool your money with a bunch of other investors to take down bigger deals you couldn’t afford on your own. You get emails with glossy brochures and promises of “10% preferred returns.” Easy, right?

Not so fast.

Most crowdfunding platforms don’t even beat a savings account after fees and taxes. And you have zero control over how the deal is run. It’s like getting on a plane where you can’t see the pilot, you don’t know where you’re landing, and they promise a nice view out the window.

The only crowdfunding setups that really pay off are the big syndication models tied to multi-million-dollar commercial properties—usually led by experienced operators with long track records. But let’s be honest: those are like dying unicorns. Hard to find. Even harder to vet. And if you’re not already in their private network? You’re not getting invited to the table.

And remember: none of this is FDIC insured. So if the deal goes sideways, you’re holding the bag.

The Quiet Wealth Builders: Private Lending and BRRRR

Now, let me tell you about the folks who don’t make a lot of noise but build serious wealth behind the scenes. I’ve seen two strategies work again and again:

1. Private Lending: This is where you lend your money to an investor or flipper and earn interest—usually 7% to 10% on first-position notes. That means you get paid before anyone else if the property sells or refinances. It’s secured by real estate, and if done right, it’s truly passive. You’re the bank.

2. The BRRRR Strategy: This is where I live. BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It’s not hands-off, but it’s one of the most powerful ways to build wealth with real estate.

Let me show you how.

My Lane: Turning Ugly into Gold

My version of passive income? It’s taking the ugliest rentals on the block and turning them into fresh, clean homes people actually want to live in. I’m talking about the properties most investors scroll right past. The ones that smell like regret and have green carpet from 1972.

I don’t buy turnkey rentals where all the equity is gone and the previous investor already made their money. I go after distressed deals. The ones with peeling paint, busted kitchens, and no curb appeal. That’s where the opportunity lives.

You go in, do smart, functional rehab—nothing flashy, just clean and durable. Paint. Flooring. Light fixtures. Maybe a new roof or AC if the numbers make sense. You make it livable, safe, and market-ready. Then, you rent it out at a fair price.

Once the property is stabilized with a tenant and some seasoning, you go back to the bank and refinance. Pull some or all of your money out. Then?

You do it again.

That’s BRRRR.

You don’t need to hit a home run every time. Singles and doubles win the game. And over time, you end up with a portfolio full of equity, cash flow, and appreciating assets—all from properties other people ignored.

Why It Works

• Forced Equity: You’re creating value by improving the property, not waiting on the market.

• Cash Flow: A well-managed rental can pay you every single month.

• Appreciation: Over time, the asset grows in value.

• Tax Benefits: Depreciation, mortgage interest deductions, and 1031 exchanges.

• Control: You pick the property. You control the rehab. You choose the tenant. It’s your show.

That’s a very different kind of passive income compared to a CD or a REIT. It takes more effort, but the upside is massive. And it’s real. It’s not theoretical.

Real Talk: What Do You Actually Want?

Here’s the deal: there is no perfect strategy.

Some people truly need the peace of a 5% CD. Others want hands-off exposure to real estate through REITs. Some dream of hitting it big with syndications. And others, like me, find their rhythm in buying beat-up houses and turning them into income-producing machines.

What matters most is that you figure out what YOU want.

Do you value:

• Total safety?

• Higher returns?

• Hands-off simplicity?

• Long-term wealth?

• Control over your investments?

Be honest with yourself. Once you know your lane, build a strategy around it. That’s how you avoid distractions and shiny objects that pull you in ten different directions.

Everything else?

Just noise.

Bonus: The Private Lender Path

If swinging a hammer or managing a property isn’t your thing, don’t worry. I’ve also seen smart people become private lenders and earn solid returns without lifting a finger.

Let’s say an investor needs $100,000 to fund a flip. You lend them the money at 9% interest, secured in first position by the property. If they don’t pay? You get the house. If they do? You earn your return. Simple.

The key is working with someone you trust, verifying the equity, and making sure there’s a clear exit plan. It’s not for everyone, but for those who want to be passive and earn more than a CD or REIT, it’s a strong option.

Final Word: Keep It Real, Keep It You

I’ve seen all the strategies. I’ve tried most of them myself. Some worked. Some didn’t. But the stuff that stuck? The stuff that built real, lasting wealth?

It was always tied to knowing what I wanted.

For me, that meant control. It meant cash flow. It meant creating equity by getting in before the crowd. So I stuck with ugly rentals and BRRRR, and I’ve been doing it for over two decades.

That doesn’t mean it’s the only way. But it’s a way. And it works.

If you’re just getting started or trying to figure out what’s next, take a minute to zoom out and ask yourself: What kind of passive income actually fits my goals?

Then go build that life.

Keep it consistent, stay patient, stay true—if I did it, so can you. This is Jorge Vazquez, CEO of Graystone Investment Group and all our amazing companies, and Coach at Property Profit Academy. Thanks for tuning in—until the next article, take care and keep building!

If you’d like to connect directly with me, feel free to book a time here: https://graystoneig.com/ceo

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