1. What is Real Estate Syndication
- A group of people come together and pool their resources to purchase real estate. By doing so, they bring all their capital so they can purchase bigger investment opportunities which would of have been difficult to do on their own.
2. Who's Involved in a Syndication?
There are two groups of people in a syndication.
- First are the general partners (GPs) or sometimes refer to sponsors/operators. They are the ones that organize the syndication through A-Z. They find the deals, underwrite, secure financing, and manage these properties.
- Second are the limited partners (LPs) or sometimes refer to passive investors. These group of people provide the cash for the investment for the down payment, due diligence cost, and or closing cost. In return, they have a equity share in the deal and receive cash flow distributions and profits at sale.
3. How does passive Ownership work?
- As a passive investor, you get to continue to live your daily life as you where prior to joining us as a Limited Partner (LP). Your sole responsibility is your capital commitment to the deal. From the moment we close on a deal, we are the ones with our sleeves rolled-up and get to actively manage this asset to assure its performance.
4. Why are we the right company for you?
- We go above and beyond in assuring the market we invest in check all our boxes. The data that we search for in these markets are population growth, job growth, median household income, median house values, crime, rent growth, cap rates, and much more. What does that mean? We will only invest in markets that are stable and growing.
5. Who can invest?
- We are currently providing 506(c) offerings for only Accredited Investors. This means a few things; you have a net worth of $1 million not including your primary residence and/or an annual income of $200,000 in each of the two most recent years, or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income in the current year.
We will solicitate and advertise these deals. - We are currently providing 506(b) offerings for non-accredited Investors (Up to 35 investors per offering) & potentially Accredited Investors. For these types of offerings, an investor must be classified as an “Sophisticated Investor.” This means that the investor has knowledge and experience with financial and business matters that the investor can make an evaluation of the risks associated with an investment.
- In addition to meeting the criteria above, there must be a substantive relationship with us, the syndication operators. There’s no clear definition provided by the SEC, but many sources provide hints as to what it can constitute such a relationship.
- We will not solicitate or advertise these deals as per SEC rules and regulations.
- Last note: Another possible way is a joint venture where a combination of two or more parties that seek the development of an investment project will share the risk associated with its development.
6. What can I use to invest?
- Cash
- Self-directed IRA's
- Trusts
- 1031 exchanges
- 401K loans
7. How and/or when are Passive Investors Paid?
- Cash flow distributions
- Cash Out Refinance
- Sale of Property
Cash Flow Distributions
- When the property makes a profit, so will you. The frequency of payments will typically be on a quarterly basis. However, depending on the investment, distributions can be delayed due to the required initial capital needed for repairs and added amenities. These delayed can vary from 3-12 months depending on how heavy of a value-add deal the asset might be at acquisition. In addition, this can also be impacted by the current vacancy rates and the time needed to lower this rate.
Cash Out Refinance
- Value-add deals can provide the opportunity to do a cash out refinance. If everyone did their job and everything lines-up, we might be able to refinance the property at a higher evaluation. With these additional funds, we can put it towards the principal on the loan and give back a good amount of the investors’ principal back. Now, we continue to hold the property, and you as a passive investor, will continue to enjoy your higher cash-on-cash returns.
- As a passive investor with a big chunk of your initial principal back, you can use this as you please. How about put it back on another deal!?! Now you can see how fast you can scale up in multifamily investments and build that financial freedom for you and your family.
Sale of Property
- You get paid when the property is sold.
- 1st: We'll pay the loan off
- 2nd: Return investor's principal investment
- 3rd: Profits of the sale paid out by share equity
When do you get paid?
- Regular cash flow distributions quarterly (Remember potential delays)
- Cash-out refinance (If deal permits)
- Sale of Property