This article adheres to strict editorial standards. Some or all links may be monetized.
On a recent episode of the BiggerPockets Real Estate Podcast, host Dave Meyer spoke with On the Market co-host Henry Washington, author of Real Estate Deal Market, to discuss house flipping and real estate investment strategies.
Meyer tapped Washington to answer a few questions directly from the BiggerPockets investing forum, including one from a member in his 50s, who had suddenly come into nearly half a million dollars.
Must Read
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don’t have to deal with tenants or fix freezers. Here’s how
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP
- No time to lower your crippling car insurance rate? Here’s how to do it within minutes — you could end up paying $29/month without a single phone call
“An investor named Damon wrote on the forums — what would you do with $400K cash?” Meyer read the question [1]. “My goal is to create passive income because my wife and I are in our fifties with no 401(k) savings.”
With the median retirement fund in the U.S. hovering around $185,000 for Americans like Damon, according to FRED data, this is an opportunity for him to get ahead. Since his windfall is over twice the median retirement fund for those in his demographic, Damon could even retire early with the right strategy in place.
Here’s what Washington suggests.
How to invest $400K for truly passive income
Washington was quick to offer up a surprising answer, considering his real estate investing background.
“I would not tell you to go flip a house. I wouldn’t even tell you to go buy a rental property,” Washington said. “I definitely wouldn’t tell you to go buy an apartment complex because I believe the key word in the sentence was that he wants to create passive income, and unless you’re investing in a syndication, ain’t nothing passive about being a landlord, don’t believe what anybody else tells you.”
Washington emphasized that, while real estate investing can be lucrative, it involves a not insignificant amount of work, and instead advised Damon to invest in private money lending for truly passive income.
“There is definite activity that you need to do, but with that amount of cash, it gives you some flexibility to be able to be a private money lender,” he said.
Washington further explained that while $400K might not be enough to “lend on 10 deals at once,” it is certainly enough to lend on one or two deals within smaller markets, noting that as someone who pays private money lenders himself, he “can’t wait until that’s the business” he’s in.
“They are making phenomenal returns on their money, and they didn’t have to deal with any of the headaches that I had to deal with, and it was truly passive,” Washington concluded.
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)
Meyer offers an alternative option
Meyer agreed that private money lending is a smart strategy, but his advice differed slightly.
“You want really passive? Be in a debt fund instead of underwriting individual deals. If you underwrite individual hard money loans, you could probably get 15, 16% of your money,” he said.
Meyer noted that with $400K, this can lead to $50K to $60K in passive income each year, which is “retirement for a lot of people” once you factor in Social Security.
He also cautioned that anyone considering private money lending should thoroughly understand the business they’re investing in before committing.
“If you’re going to underwrite and lend to a flipper like Henry individually, you’ve got to understand his business,” Meyer said. “You have to be able to assess not only his risk as an operator, but you have to be able to assess every deal that he’s doing.”
Meyer noted that “it’s not super complicated” to learn how to assess the risk — but it is a skill you’ll need to develop first, so if you’re seeking a truly passive experience, “just go find a debt fund with an experienced operator and then you can do truly nothing.”
Washington agreed that there is a risk involved and emphasized the importance of only lending “to an experienced operator.”
He also said that while $400K is a significant amount of money, you would still “need to lend to an operator that invests in a market where that money’s actually going to cover doing a deal or two,” noting that it’s not quite enough for Seattle, but it is enough for Arkansas.
Finding an operator: Simple options for private money lending
If you’re interested in private money lending, there are easy options available to you right now.
The Arrived Private Credit Fund invests in short-term loans that are used to finance professional real estate projects like renovations, property rehabs and new home construction.
The Private Credit Fund generates cash returns by collecting interest payments on the loans and distributing monthly payouts to investors, historically paying an annualized dividend yield of 8.1%. If Damon were to invest all $400K of his windfall, this would amount to $32,400 a year, although diversification is almost always a good idea.
The process is simple: Just choose from their diverse investment options, buy shares that fit within your budget, and earn rental income without the hassle of being a landlord.
Another way to jump into real estate investment is with the help of mogul.
Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
What To Read Next
- Savvy investors are using 5 stealthy alternatives to safeguard their portfolios — here’s how to build wealth in 2026 even if trillions vanish from US stocks
- Robert Kiyosaki says this 1 asset will surge 400% in a year — and he begs investors not to miss its ‘explosion’
- I’m almost 50 and have nothing saved for retirement — what now? Don’t panic. These 6 easy steps can help you turn things around
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.
We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.
[1]. BiggerPockets. “How to Find Profitable Rentals in 2025 (Lazy + Expert Methods)”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.