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The rise of hustle culture has many people dreaming of getting rich through passive income, trying their luck at online courses (1) or automated digital storefronts (2) and waiting for the big bucks to roll in.
But it was the real estate game that put financial guru Pace Morby (3) on the map. Morby, a property investor who hosted a house flipping show on A&E, recently talked about his favorite “lazy” income-generating real estate asset on a business podcast.
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Speaking to Graham Stephan and Jack Selby of the Iced Coffee Hour, (4) Morby touted RV parks as the property type that has made him millions in passive income.
‘It’s mostly gravel’
“There’s almost no management, the manager lives onsite and there’s basically nothing to fix because it’s mostly gravel,” he explained, contrasting the ease of maintaining his RV parks to the much greater demands of maintaining his apartment portfolio.
In his experience, these campsite properties can bring in $30,000 to $40,000 each per month, even after expenses, including loan repayments, and all with minimal oversight. Morby said it’s more than he makes from his car washes, venues, rental properties and other such holdings.
“I call them the only true ‘one-and-done’ asset,” he told the hosts.
Much like franchising, RV park ownership may not be the most captivating or prestigious endeavor, and thus may not be on most people’s radar at all. But if you have the means to buy an existing park, it can be a consistent, dependable, low-effort money maker that’s AI-proof to boot.
But that’s a big can. Here’s why.
Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going
The costs of low effort
Like almost all business ventures (aside from those ebooks and online courses), the path necessitates some startup costs — and they aren’t insignificant. But Morby has some creative ways around them.
The main roadblock for most is the upfront price tag of the land, which typically runs for $3 million to $7 million. Morby’s method for tackling this hurdle is one of his most famous, though perhaps not one everyone has the stomach for: purchasing on seller finance.
“I go to the seller, who is the number one bank,” he said.
Morby has discussed this strategy before (5). Slowly repaying the seller back over time, as one would a lender, can allow the seller to bypass banks, real estate agents and the open market, secure the price they want and divvy up capital gains (6) over time (which can reduce the amount paid due to progressive taxation), all while receiving steady repayments. For the buyer, going through the seller may make it easier to obtain a property they would not have qualified for through traditional financing, and they can also get a deal closer to the terms they want.
In the case of RV parks, the deed for the land is transferred and loan terms drawn up, which include the buyer taking over operational costs. The seller can agree to cover the entire loan cost (minus the down payment) or a portion of the loan, with the remainder covered by a commercial or investment loan the buyer takes out.
While it’s not the traditional path, others in the sector say it’s something they’ve seen used successfully before.
When seller financing works best
“It’s totally possible to get seller financing on something like a commercial asset,” says Ryan Dossey, a veteran of the real estate investing and brokerage space who co-owns property selling platform SoldFast. “A lot of RV parks are owned by folks in their 50s, 60s, 70s or 80s who are going to want to retire at some point. It’s totally possible to get straight owner financing for one of these.”
But he says this model works best when there is no outstanding loan on the property — or, if there is, that you can either offer enough of a down payment to cover it or are able to legally assume it.
This means you must have the liquidity not just for the asset, but for future repairs and maintenance. Common sense says taking on property that you simply can’t afford, especially a property with debt, is never advisable, even if that property may earn you some income.
When it comes to assuming someone’s debt, Dossey adds that some of the more niche financing tactics can get a little hairy as far as whether they’re completely safe or above-board. He points to potentially safer passive income real estate investments, such as adding an accessory dwelling unit (7) to your single family home’s lot or buying a multi-unit property and living in one unit while renting the rest out.
Tips on RV park investing
When selecting a property, Morby said he ensures it is profitable enough for his liking — garnering at least $15,000 net monthly — which usually means looking at dozens to buy just one. The type of site is important, as recreational properties are extremely profitable during the high season and often unprofitable in the low season, while other sites have more long-term, year-round tenants. Dossey says access to city utilities is also key.
Upon acquisition, Morby assesses where he can implement operational efficiencies across the business to cut costs, minimize work and maximize profit, such as hiring a live-in site manager.
Dossey adds that the most lucrative case would be if the owner “hasn’t maintained or optimized the park, hasn’t raised rents in a long time and you’re able to make improvements and bump up costs.”
Invest in residential real estate
Morby, who says he owns 40 RV parks that earn him approximately $100 million (8) per year, has faced his fair share of criticism (9), with RV park owners offering mixed reviews of the passive earnings potential in online forums (10). Some claim they’re only bootstrapping given the labor and costs, while others say the math and stability of return is very attractive, though it’s depends on location and the prices you’re able to charge.
But the reality is that these methods are far from guaranteed and aren’t necessarily as easy as online influencers (11) may suggest.
If betting on RVs seems a little too far out there, you could instead invest in traditional residential real estate, as long-term housing demand has historically remained resilient.
Of course, buying a rental property isn’t cheap. Between saving for a down payment, qualifying for a mortgage, paying insurance premiums, and covering ongoing repairs, the upfront number can be daunting.
That’s where platforms like Arrived come in.
Backed by world-class investors like Jeff Bezos, Arrived lets you purchase shares of vacation and rental properties across the country. And you can get started with as little as $100.
Arrived distributes any rental income generated by properties to investors monthly, allowing you to potentially set up a passive income stream without the extra work that comes with being a landlord of your own rental property.
The best part? For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
Those with more capital on hand have other options too.
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.
With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Consult an expert
While investments like residential real estate can generate steady passive income, concentrating too heavily in one asset class could mean missing out on higher-growth opportunities.
An experienced professional can help you build a diversified strategy and determine how much of your portfolio belongs in stocks, real estate and other investments, based on your financial goals and retirement timeline.
If you have more than $250,000 in savings, platforms like WiserAdvisor can help you find a vetted FINRA/SEC-registered advisor near you for free.
All you have to do is answer a few simple questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor will review its network and match you with up to three vetted, reputable advisors aligned to your specific needs.
WiserAdvisor does the heavy lifting when vetting financial advisors on its roster. Each advisor is screened based on their years of experience, their SEC/FINRA registration and records, and compensation criteria.
The best part? You can schedule a no-obligation consultation with your matches and see which advisor is the best fit for your long-term goals.
Note: WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.
Diversify your portfolio with stocks
Real estate can be a powerful wealth-building tool, but it’s rarely wise to put all your eggs in one basket.
Stocks remain one of the most effective ways to build wealth over time. Since 1957, the S&P 500 has delivered average annual returns of roughly 10.51% (12).
While investing in real estate can be profitable over the long term, stocks typically offer better capital appreciation, provided you’re making the right calls.
While real estate can provide reliable income and appreciation, stocks have historically offered greater potential for capital growth over long investment horizons. The challenge, of course, is staying invested consistently instead of trying to time the market.
Investing even small amounts can make a meaningful impact over time — thanks to the power of compounding. For instance, investing just $20 per week for 30 years could grow to more than $179,000, assuming it compounds at 10% annually.
That’s where automated investing tools can help. Apps like Acorns automatically invest your spare change — helping you steadily build wealth without having to think about every market move.
All you have to do is link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock. Over a lifetime, a little bit of consistency can go a long way.
With Acorns, you can invest in an ETF built and managed by experts with as little as $5 — and, if you sign up today and set up a recurring investment, Acorns will add a $20 bonus to help you begin your investment journey.
— With files from Becky Robertson
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.
Business Insider (1); Shopify (2); A&E Television Networks (3); The Iced Coffee Hour/ YouTube (4); Clint coons Esquire/ YouTube (5), (11); Investopedia (6); American Planning Association (7); @PaceJordanMorby/ X (8); Reddit (9), (10); Investopedia (12)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
