Diversify with private credit and equity real estate investment funds that make non-concessionary impact investments to expand access for America’s working families to affordable, safe communities.
Senior Secured Mortgage Fund that makes private credit investments to experienced real estate sponsors. Targets monthly passive income and annual returns of up to 10% for accredited investors.
Private Real Estate Investment Fund that invests in income-producing, attainable rental communities. Targets monthly passive income and annual returns of up to 12% for accredited investors.
Private Preferred Credit Fund that makes primarily equity (debt for tax purposes) and debt investments to preserve attainable rental housing. Targets monthly passive income and annual returns of up to 11% for accredited investors.
Private Real Estate Investment Fund that invests in all stages of development to build, improve, and manage attainable rental housing. Targets quarterly passive income and annual returns of up to 13% for accredited investors.
See how DLP Capital’s lending fuels real estate projects that transform communities. These stories highlight the creativity, determination, and results of the talented sponsors we work with.
Explore a selection of our recent transactions across lending, acquisitions, and investments — demonstrating our commitment to delivering momentum, certainty, and impact for real estate projects nationwide.
Our core value of Driven for Greatness is about adopting a growth mindset and consistently seeking out opportunities to learn. The Twenty is our way of helping you do just that, named after the core value that sets the tone for all we do: the Twenty-Mile March. Learn from our latest webinars, articles, podcast episodes, and more.
In his blog, Founder and CEO Don Wenner shares insights from the lessons he’s learned as a faith-driven CEO who has grown DLP Capital to be an Inc. 5000 Fastest-Growing Company for 13 consecutive years at just 40 years old. Learn not just from his own experiences as an entrepreneur, father, and husband, but the most important lessons he has learned from friends and mentors like John C. Maxwell, Lloyd Reeb and others.
From impact investing to building an extraordinary organization while being equally focused on an extraordinary family, Don Wenner’s Elite Impact Podcast covers it all. Learn valuable insights and hear incredible stories of leadership, impact, and more from Don and his guests.
Experience DLP Capital events anytime. Watch keynotes, panel discussions, and training sessions featuring industry leaders and experts driving innovation and impact.
Access DLP Capital’s complete webinar library, featuring quarterly fund updates, educational sessions, and special presentations designed to keep investors informed and inspired.
Read the latest DLP Capital quarterly report for the most recent performance of DLP Capital-sponsored funds, updates on current investments within the funds, stories of our impact in action, company insights, and more.
CEO Don Wenner has built a life—and a company—dedicated to transforming lives through access to safe and attainable housing. Today, DLP Capital is creating solutions to the affordable housing crisis, redefining community, and helping investors discover success with significance.
DLP Capital’s purpose-driven, non-concessionary impact investments create housing, jobs, connection, and opportunity for families across America. Discover more about how DLP invests with purpose.
Meet the visionary leaders committed to executing DLP’s vision of transforming the lives of both residents and investors through the building of Thriving Communities.
Stay inspired by the latest updates from DLP Capital. Explore how we’re driving meaningful change, earning recognition, and celebrating milestones as we continue building thriving communities across America.
At DLP Capital, work is more than a job—it’s a mission. Join a team dedicated to solving America’s housing crisis, building thriving communities, and creating opportunities for families across the country.
Our mission starts with connection. Reach out to our team or visit one of our locations to learn more about how DLP Capital is creating impact where it matters most.
How Can I Boost My Financial Freedom With Passive Real Estate Income?
Nearly everyone dreams of making money in their sleep. But what does that really mean—and how can that concept help you achieve financial independence?
March 11, 2025
Investment Insights
Among legendary investor Warren Buffett’s most potent fragments of wisdom is the idea that “if you don’t find a way to make money while you sleep, you will work until you die.”1
Essentially, Buffett is saying that it is impossible to achieve financial independence if you rely on exchanging your time and labor for money.
It is difficult to imagine that anyone’s ideal retirement plan involves working indefinitely. However, working past retirement age is becoming more common. According to statistics compiled by the Pew Research Center, nearly one in five Americans aged 65 or older were still employed in 2023; in the late ‘80s, just one in ten were still in the workforce.2
So, how can you sustain your lifestyle without having to work for money? How can you enjoy your golden years—or even retire early?
The answer lies in generating passive income. In contrast to active income from employment, passive income can help you achieve financial freedom. These terms refer to a point at which you’ve accumulated enough resources to cover your living expenses for the rest of your life without ever having to work again. In this article, we talk in detail about passive income, discuss why it matters, and brainstorm ways you can generate passive income and get closer to financial freedom—all with a special focus on real estate investing.
What is a passive income?
Passive income, also known as unearned income, refers to earnings derived from activities that require little to none of your time or labor.
As the Internal Revenue Service (IRS) explains, passive or “[u]nearned income includes investment-type income such as taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, cancellation of debt, and distributions of unearned income from a trust.”3
Distributions or rents obtained from allocations to a private real estate fund, syndication, publicly-traded REIT, or self-managed rental real estate are also considered forms of passive income.
As can be observed, passive income generally involves earnings from invested capital. This stands in contrast to active income, which comes from wages, salaries, or self-employment income.
Why is passive income important?
Passive income matters because it’s the foundation to financial freedom. Specifically, you achieve financial independence when you’re able to generate enough passive income to cover your living expenses for the rest of your life. After that, active income becomes optional—you can downshift your career, work fewer hours, or exit the workforce altogether without financial consequences.
In fact, passive income of any amount is beneficial, even if it’s not enough for you to become financially independent. Having passive income to rely on even while you’re actively employed can dampen the volatility of your overall earnings and increase the likelihood that you can count on at least some income even if you lose your job, fall ill, or experience market conditions that are unfavorable to your investments.
To illustrate this idea, consider an individual who earns $300,000 a year in active income from a full-time role as a product manager at a technology company, and $50,000 per year in passive income via distributions from a private real estate fund.
In 2024, the labor market in the tech sector took a turn for the worse, and over 124,000 tech workers—including our product manager—were laid off.6 Our now-unemployed product manager’s active income quickly declined from $300,000 to $0.
Absent any savings, our product manager would have to take on substantial credit card debt or deplete their retirement savings to make ends meet. Thanks to their $50,000 in passive income, however, they were able to keep their nest egg intact by making sharp but temporary spending cuts—like relocating to a lower cost-of-living geography and taking on roommates—while they looked for a new role.
Consistent monthly or quarterly distributions from private real estate funds can provide you with current passive income, which can help you supplement your active earnings as you work towards financial independence.
A few select forms of income appear to straddle the line between passive and active. But even ostensibly ambiguous methods of making money usually fall cleanly into one bucket or the other. In particular:
A second job or a side gig isn’t passive income
Some workers who have a primary “day job” want to boost their income by taking on secondary employment. Data compiled by the Bureau of Labor Statistics (BLS) showed that in 2024, about 8.4 million Americans—roughly 5.2% of the workforce aged 16 or older—worked more than one job. The most common arrangement, practiced by approximately 4.8 million or 57% of workers with multiple jobs, was to stack a secondary, part-time role on top of a primary, full-time position.4
While a second job, side gig, or side hustle can be a powerful way to augment your earnings, it’s not a form of passive income. Like your primary job, your second job still requires your ongoing involvement—so it’s considered active, rather than passive, income.
Investments that don’t generate cash flow don’t provide passive income
It’s true that most forms of passive income require invested capital—but not all investments produce passive income.
Real estate investments that don’t generate ongoing cash flow and non-dividend-paying stocks, as well as cryptocurrencies or precious metals all have the potential to benefit from appreciation over time, but they aren’t income–producing assets—so they can’t help you generate passive income.
Some private real estate funds—such as the DLP Housing Fund, DLP Lending Fund, and DLP Preferred Credit Fund—provide passive income for investors in the form of ongoing and dependable monthly distributions.
A business you’re actively involved in isn’t passive income
This last form of income can sometimes be truly ambiguous. For example, you can have a semi-passive business that takes just an hour or two a week to run.
If you operate your business part- or full-time—or if your business cannot function autonomously without your input or involvement—you’re earning active income, not passive income.
Self-managing one or more rental properties is a good example here. You may think that rents are passive, but some landlords on Reddit self-report that they spend anywhere between “a few hours a month” to “5 hours per week” managing their properties.5 If you own multiple properties, it can quickly snowball into a full-time commitment—making any rents you earn far from passive.
Interested in a truly passive approach to real estate investing? Private real estate funds give you the ability to invest in rental housing—all without the hassle of being a landlord.
Investing in real estate can yield passive income—but not all forms of real estate investing are passive.
In fact, most approaches aren’t.
As discussed before, being a landlord as well as an investor is practically a form of active income, since the time spent on everything from market research, acquisitions, and renovations to leasing, maintenance, and bookkeeping can quickly add up to the demands of a full-time job.
Some real estate investors believe hiring a property manager can free them from the hassles of “landlording,” but even that approach may not be passive. Screening and vetting property managers, negotiating fees and contract terms, approving high-dollar expenses, and coordinating with other professionals such as attorneys and accountants all represent demands on your time.
Most importantly, there’s still the highly active role you’ll need to play as an investor. Researching markets, bidding on properties, conducting title, structural, and financial due diligence, and acquiring or disposing of rentals can take up dozens of hours of your time per week.
This makes the “standard” approaches to real estate investing both time- and capital-intensive—an unfavorable combination indeed.
Are there passive approaches to real estate investing?
So what options remain for investors interested in a truly hands-off approach to real estate investing?
Arguably the most passive option available would be to invest in either a private real estate fund or a publicly-traded REIT.
Private real estate funds are available to individuals who meet the U.S. Securities and Exchange Commission’s (SEC’s) definition of an accredited investor, while exchange-traded REITs can be purchased by all investors.7
Both options are effectively passive: beyond selecting a fund manager and an asset class, you don’t have to do anything else. That’s because private real estate fund or public REIT managers handle the rest—everything from entitling, constructing, acquiring, or disposing of properties to improving, repositioning, operating, and leasing them.
In other words, you play a passive (rather than active) role as an investor, and don’t have to worry about any aspects of landlording at all.
Preferred returns: a source of passive income?
But between private real estate funds and public REITs, which should you choose?
When it comes to passive income, private real estate funds have one distinct advantage over their public counterparts: it’s common for private funds to target paying investors a preferred return—an ongoing, contractually guaranteed form of income that takes priority over other distributions.
In other words, a private real estate fund’s income must be used to satisfy your preferred return before the fund’s managers are allowed to earn a performance fee. Even in a year with less-than-stellar returns, your preferred return may remain intact; fund managers, meanwhile, may receive no performance fees during a down year.
This means that private real estate investors can potentially count on their fully-passive preferred returns with greater confidence than investors who allocate to public REITs—a notable protective factor during market downturns.
Preferred returns have the potential to be a stable source of monthly or quarterly passive income. Learn more about private real estate investing with DLP Capital today.
What is passive income in financial freedom? Passive income is a form of earnings you generate from activities that require little to none of your time or active involvement. Passive income is the cornerstone of financial freedom—it is what enables you to sustain your lifestyle without having to work to afford it.
What is the meaning of passive income? Passive income describes a type of income that you don’t have to work to earn. Passive income can come from rents, dividends, interest, royalties, or even distributions from a privately-held business. Passive income is “passive” because, unlike earnings from traditional or self-employment, it can be generated without your active participation.
How to make passive income? There are many ways to make passive income. Investing in real estate, publicly-traded stocks and bonds, or private business interests are all common ways to generate passive income. However, you typically need money before you can generate passive income—nearly all forms of passive earnings are derived from capital rather than labor.
Why is passive income important? Passive income is important because it is a key ingredient in becoming financially independent. This means that you can sustain your lifestyle indefinitely without having to rely on income from active employment.
How to build financial freedom? You can get on track towards financial freedom by assessing your current financial situation, learning how to budget, eliminating high-interest debt, spending less than you earn, and investing the difference wisely.
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