Passive Real Estate, Oil, and Gas Investing: The Story of the Rise Capital Funds - The Texas Developer

The traditional real estate investor will typically start by buying a property at a discount and fix it up to be sold or rented for a profit.

The same can, in a way, be said about investing in the oil and gas industry. Investors will look for underperforming wells and work to increase production to bring in a positive ROI.

The problem with these approaches is that there is an excess of opportunities in both industries but not enough investors with the time and know-how to get their hands dirty and turn a profit.

However, that all changed when Brent Franklin decided to start Rise Capital. The story begins with a young Brent earning his living as a laborer in the oil and gas industry.

Seeing a lot of promising wells that just needed some, as he puts it, “tender loving care,” he decided to start investing.

Unfortunately, it wasn’t as easy as he hoped. He was lied to by operators, sent unforeseen large bills and fees by managers, and beaten out on a number of contracts.

While the industry was ripe for investment, it certainly wasn’t friendly. However, Brent kept at it and was eventually able to learn the ins and outs of the industry and establish relationships with a number of companies.

It was then that he decided to start Rise Capital so that other investors didn’t have to go through the same problems he did. He explains: “I didn't want [other investors] to have to go through the learning experience or the learning curve of trying oil and gas on their own. I wanted them to be able to skip the line and partner with professional companies across the oil and gas industry…”

The business model is straightforward: Buy existing and overleveraged wells that require minimal investment to increase production and hire third-party operators to manage the day-to-day operations.

This allows for passive investors with no time or industry experience to invest in opportunities that they never would have had access to without worrying about managing their assets.

Rise Capital also offers similar passive investment opportunities in the real estate world. The company purchases properties at a discount and either flips them for a profit or holds them for tax benefits.

The beauty of this system is that high-earners can invest in the real estate, oil, and gas industry without lifting a finger and take advantage of the numerous tax deductions these industries offer.

For example, a $200,000 investment can mean $75,000 in tax savings and the ability to generate passive wealth through dividends and long-term asset appreciation.

Diversification is key to lower risk which is why Brent created a way for investors to invest in “units” instead of whole projects. In other words, just like stocks, investors can invest in a part of a project instead of the whole thing—allowing for more diversification.

In the end, Rise Capital’s novel investing structure opened up a whole new realm of passive investment opportunities with major tax breaks and the ability to diversify investments.