The best way to invest in real estate and gain knowledge along the way is becoming a passive Investor in a real estate syndication. A syndication is simply pooling money together from investors for the acquisition of an asset for the topic of this conversation the asset is Multi-family real estate.
With Syndications, Passive investors have the option of investing capital with experienced operators. Syndicators usually raise money on the by the deal basis. They are always searching for deals through multiple avenue such as direct mail, leads from a property manager, their network being the most important. Real estate syndication is a great strategy because it also allows for other benefits like diversification, economies of scale and passive investing.
Real estate is global. Diversification amongst location of properties is a major key. Some of us live in states where natural disaster such as hurricanes and major flooding happen all the time but networking with syndicators from all over you have access to deals to take away that risk off maybe your building blowing away or tenants displaced because of flooding or other damages. Our fund is nationwide so we are stuck in high cost California or areas like Baltimore that have been obliterated. While there is opportunity in each we are not limited to just making money locally.
Economies of Scale
When it comes to buying property it can be a long tedious process that nobody wants to go through. So imagine how many times you have to go through the due diligence and closing process to reach your freedom number. When you own 20 single family homes thats multiple site visits, 20 lawns that need to be mowed, 20 roofs thats going to need to be fixed and that will cost you an arm and both your legs. The best upside to apartments is that when one tenants leaves you still have X number of tenants paying you rent covering your operating expenses and more. This is why we love multi family properties. Owning multiple units is the equivalent of owning multiple stocks in a mutual fund. If one stick breaks you don’t lose the bundle.
Being a landlord isn’t for everyone but enjoying a nice return on your investment is. Being a passive investors provides “mailbox money”. It’s your money working for you while somebody else gets to deal with the responsibilities of managing the asset. I always tell people that the best thing they can do for their money is to stay focused on their profession and then entrust their excess funds into the hands of men whose daily activities consist of managing money. That was a little me mixed with Og Mandino.
You may be a banker, or a lawyer or a barber but just like you are great at your job there are men whose job it is to professionally manage money. Just as it pays to get a professional haircut or have a CPA manage your funds or prepare your taxes it also pays to invest with men who manage investments for a living.
Todd Capital Acquisitions is positioning itself to have a stellar 2017 and we would love to have you on board. If you are interested in joining please email email@example.com
Written by Lance Pettway
Edited by Charles Oglesby, JD