Frequently Asked Questions

A syndication is simply a pooling of resources to invest in something as a group. A real estate syndication allows passive investors (known as “Limited Partners” or “LPs”) to invest in a project that is larger than they would be able to purchase as individuals.

Passive investors don’t do any of the work to manage the project. Sponsors or the “General Partners” or “GPs” assemble the team, spearhead the property purchase, and execute the business plan to provide a return for the benefit of all investors.

Each apartment community acquisition is in the form of a single-purpose entity (a Limited Liability Company or LLC).  This is a typical asset protection strategy.  Each individual investor is a member, and thereby an owner, in the LLC.

Typically $50,000, but it can be as low as $25,000.

Investment returns are expressed in multiple ways.  The target returns are about 7 to 8% annual cash-on-cash returns during the investment hold period that does not include the profit from a refinance or sale.  The internal rate of return (IRR) is a metric that considers the magnitude and timing of the cash flows from the investment.  The target IRR is in the 15% range over the hold period.  The equity multiple is the number of times the total return is in comparison to the initial investment.  We target equity multiples of 1.7 to north of 2.0; therefore a $100,000 investment would yield $170,000 to $200,000 which includes return of the initial investment.

The typical distribution is monthly, but some are quarterly.

Typically the hold period is about 5 years but can be as short as 2 years or as long as 7 years. The actual hold period is a function of many things such as the business plan execution and the economic circumstances at the time.  Ultimately the sponsorship team’s goal is to maximize the investors’ returns.

Real estate syndications are very tax efficient because they are direct real estate investments. As a limited partner, you will benefit from your portion of the investment’s deductions for property taxes, loan interest, depreciation, etc. Our operating partners also use a cost segregation strategy to accelerate depreciation. This results in significant deferral of tax during the investment hold period. At the time of sale, the partnership gains are treated as long-term capital gains. Consult your tax professional for additional details.

Yes – You can invest in our opportunities with certain retirement accounts such as a self-directed retirement account or a solo 401(k). We are happy to discuss how to boost your retirement account investing returns with direct real estate investing.

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