“I have a 401k match
and stocks but no
real estate investments”

Sound familiar?

My name is Sean Kelley and I spent the first part of my career working in technology at Microsoft, a startup and DocuSign. Like most professionals, I was invested in my 401k match program and stock grants that were provided from my employer.

This is very typical, and it wasn’t until I left technology that I learned about the world of real estate syndication… A fantastic investment vehicle to diversify your portfolio and get real estate benefits with no sweat or headaches.

Read on to learn more on why passively investing in multi-family real estate is an amazing asset that provides:

  1. Cash flow / monthly passive income

  2. Above average returns

  3. Ridiculous tax benefits

  4. No landlord responsibilities with all the benefits of real estate

  5. Lower risk and a hedge against Inflation

How would you like to own an apartment complex without having to manage it?

Why invest in
passive real estate?

  • How’s monthly deposits into your bank account sound? Unlike stocks and bonds, multifamily investments generate regular cash flow with the income generated by the property. That is regularly distributed back to investors.

  • The average stock market return over the last 20 years was 7.45%. However, when you add in fees, inflation, and taxes that return becomes only 2.95%. Multifamily syndications typically have average annual returns of 10% and above. That is after fees, inflation and even taxes.

  • We pass through the tax benefits to the investors and use what’s called bonus depreciation and cost segregation strategies. These are what make real estate investing extremely attractive from a tax standpoint. What this means is you’ll get to have a passive loss on paper that helps offset some of your gains. The net result is keeping much more of your profits than you would be able to in the stock market.

  • By passively investing you will own and receive real estate benefits without any of the normal headaches of tenants and property management. You still receive the tax benefits, property appreciation, and regular cash flow… the best parts.

  • During the 2008 financial crisis defaults on single-family loans soared, hitting 4% in 2010. In contrast, defaults on multifamily loans peaked at only 0.4%. Simply put, people need a place to live, and apartment complexes are about as recession proof as you can get.

 

Why doesn’t everyone do this?

Great question. There are several reasons why you may never have heard of this type of investment and why more people don’t do it.

  1. You have to qualify for an investment

    There are two types of syndication investments. Depending on the investment you will either need to personally know the sponsors of a deal and/or be an accredited investor. This greatly limits who can invest in these types of deals.

  2. Investments typically start $50,000 minimum

    The minimum investment is too high for many people and that’s a non-starter for them.

  3. Your capital will be tied up for a few years

    Real estate is less liquid than something like stocks which you can sell at any time. We target 3-7 years to execute the business plan which includes things like adding value by performing renovations, adding amenities, reducing expenses and raising rents to market rate. There is a refinance in year 2-3 which allows us to return a large portion of your original invested capital while retaining your equity.

  4. There is a learning curve

    Real estate syndication is more complicated than just buying a stock. There are some new terms to understand and evaluate an investment properly. Some investors don’t want to spend a little time learning something new.

While there are some barriers to entry, investing in a real estate syndication is one the best assets you can add to your portfolio.

Ready to Learn More?

Read frequently asked questions by our investors.