General Partners vet a multitude of real estate deals to source the most lucrative investment opportunity.
The investment opportunity is shared with Limited Partners, and funds are collected for the purchase of the asset.
General Partners execute on the business plan, while passive investors receive cash flow and build equity.
When the asset is refinanced or sold, investor capital is returned (initial investment plus their share of profits).
Real Estate Syndication is a way for investors to pool their capital together. This allows investors to increase their buying power for the purpose of investing in real estate.
General Partner, or “GP”, is the leading party in the syndication that orchestrates the deal. The GP conducts due diligence, executes the business plan, and distributes returns.
Limited Partner, or “LP”, is a passive investor who invests their money (Cash/401k/IRA) into a project in exchange for equity. Their role is to be passive.
Accredited Investor is an investor qualified to participate as a Limited Partner by having annual income of $200k, $300k jointly, or a net worth of $1M (excluding primary residence). Full SEC Definition
Private Placement Memorandum, or “PPM”, is an offering document that outlines the investment opportunity which includes: the risks associated with the deal, the business plan, projected returns, and return distribution terms.
Distributions are profits from the syndicated property that are distributed among investors on a periodic basis from rent collection, as well as after the refinance or sale event.
Equity Multiple is defined as the total cash distributions received from an investment, divided by the total equity invested during the investment period.
Over the 25-year period from 1992 through 2017, multi-family real estate provided the highest average annual total returns (9.75%) of any commercial real estate sector with the second lowest level of volatility (7.75%).
(CBRE, NCREIF, Q3 2017)
The latest long-term outlook for U.S. multi-family rental housing indicates the net gain in occupied units—from 15.4 million in Q2 2020 to 17.4 million in Q2 2030—representing an 11.6% demand increase in over 65 metro markets.
(CBRE Econometric Advisors)
With rental income coming from a diversified pool of tenants, multi-family real estate has a big advantage compared to shopping centers, warehouses, or office buildings where a majority of their income is generated from a few anchor tenants.
Many investors understand that real estate builds wealth more consistently than other investment vehicles.
Rent minus expenses equals cash flow. Collect more rent each month to outweigh expenses and become cash flow positive.
With a low correlation to other major asset classes, spreading risk across multiple asset classes reduces volatility.
Write off a part of your property’s value each year to offset your tax liability for income & capital gains earned as an investor.
As the mortgage is paid down, or by adding value to the asset, the value of the property increases, ultimately building equity.
The increase of price in an invested asset drives higher value, generating capital gains in real estate over time.
When debt is used to purchase property, investors can achieve a higher ROI than otherwise possible.
When comparing average annual returns, investors who diversify into real estate tend to outperform those who do not.
As prices of goods and services increase over time, investing in real estate has proven to outperform inflation.
Our investment calculator is designed to show investors a journey your capital contribution may take when invested into a real estate syndication with a 5-year projected hold period.