Buying a rental is still the classic first move in real estate. You find a property, place a tenant and, if the numbers work, you collect a little more rent each month than you owe on the mortgage and expenses. What's left over is cash flow.

The part people don't always talk about is that a rental is work. Tenants move out. Water heaters break on a Sunday. One long vacancy can wipe out a full year of cash flow.

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So the investors who know rentals best are starting to hand off the landlord work and keep the real estate. In interviews with Business Insider, financially independent investors kept coming back to two hands-off options: real estate syndications and private money lending (1). One of them, lending, can pay 10% to 12%, and once a deal passes vetting, funding it takes about 30 minutes.

A syndication lets you put money into a bigger deal — an apartment complex, a student-housing project, a boutique hotel — without buying or running the property yourself. A sponsor finds the deal and handles the day-to-day work. You put in capital, get a share of the rental income and, if the property sells for a profit, you get a share of that, too.

Cody Berman started out the hard way, first with a house hack and then with rentals that brought in enough cash for him to live on. Today, much of his real estate exposure comes through syndications because he no longer wants the work that comes with owning the property himself.

"I still want the real-estate exposure, but I don't want to go out there and just buy a 20-unit apartment building myself and then have to get it tenanted and figure out how to set up all the maintenance stuff," Berman told Business Insider (2).

In a syndication, he might put money into a 100-unit complex in another part of the country — a building he's never seen — because he trusts the operator.

"I'll make money every quarter on cash-flow distributions based on the rent the property is generating," he said.

If the sponsor sells, he gets his capital back plus a share of the upside. He calls it "owning rental properties without actually having to own rental properties."

But there are compromises. A limited partner doesn't get the control or the full upside the sponsor gets, and the money is usually locked up for three to seven years. That makes the operator the whole game.

Berman vets the operator he backs through referrals and interviews: "Pretty much everyone that I've ever invested with has been through a word-of-mouth referral plus an interview, talking to the person, doing my research."

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The second strategy skips property ownership altogether. Instead of buying or renovating the property yourself, you lend money to the investor who is doing the work and pocket the interest.

Carl and Mindy Jensen built a net worth of more than $5 million and retired early after trying a little of everything, including live-in flipping (3). Private lending is one of their favorite approaches for a simple reason: "The private lending generates such a nice return that it's difficult to be like, 'No, we don't want to have the easy money,'" Mindy Jensen told Business Insider (2).

The returns are the main attraction. Josh and Ali Lupo started lending to other real estate investors in 2025 and have been pulling double-digit returns.

"In the private money lending world, 10 to 12% interest is very common," Josh Lupo said. "That's the baseline." He told Business Insider that the lender usually sets the terms, and the rate depends on the length of the loan.

You won't pull 10% to 12% out of a high-yield savings account. One of the main risks is that the borrower might stop paying. That's why the Lupos do their checking early, before they lend the money. After that, there's almost no work left.

"It takes us 30 minutes driving to the bank, wiring the funds, and then the investor that is borrowing the money sends us updates, and that's the extent of it," Josh Lupo said.

Neither strategy is really for beginners. You need real money to start, and it helps to know the local real estate market where the deals and borrowers come from.

Many syndications are only open to accredited investors, so a lot of people can't get in. Under U.S. Securities and Exchange Commission (SEC) (4) rules, that usually means you have more than $1 million in net worth excluding your home — or you earn above $200,000 a year ($300,000 with a spouse) for each of the last two years.

Even if you qualify, your money can stay locked up for years, and you depend on the sponsor to do a good job. That's why Berman's referral-and-interview check matters.

Private lending has a lower barrier because you do not need to be an accredited investor, but it also puts more risk on your judgment. That's why the Lupos spend time checking the borrower and the deal before they send any money.

Both strategies let you invest in real estate without dealing with tenants or repairs. But you still have to vet the deal, the borrower and the operator. Get that wrong, and you're back to doing the very work you were trying to escape.

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Business Insider (1); Business Insider (2); Sage Door Realty (3); U.S. Securities and Exchange Commission (4)

This article originally appeared on Moneywise.com under the title: Investors with $5M+ are done being landlords — and one passive strategy pays 10% to 12% 'easy money'

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