What is a Syndication?
A real estate syndication is a partnership between investors to buy real property. The investors combine their skills, resources and capital to purchase assets that would otherwise be difficult to acquire on their own.
The typical structure consists of general partners and limited partners.
General Partners
General Partners, or syndicators, manage the operations of the asset.
They execute the business plan of the property from acquisition to daily operations to disposition.
They have full liability over the company and its decisions.
Limited Partners
Limited Partners are passive investors in the asset.
They provide capital for a portion of the equity investment in the property and are not involved in the daily operations of the company.
They have no personal liability beyond their investment.
Benefits of Investing in Multifamily Syndications
Cashflow
Cashflow is King. Multifamily properties provide a reliable stream of income through ongoing operational income. You will receive cash distributions.
Tax Benefits
Lower your tax burden, legally. The tax code provides incentives to real estate owners and investors. This allows you to make deductions against your income.
Appreciation
Multifamily real estate is valued on the income it generates. Appreciation can be forced by increasing income and reducing expenses. Unlike single family investments which only appreciate as the neighboring home values increase.
Ownership
The property is owned by you and other partners in the syndication. This is unlike stocks or REITs. Investing in syndications enables the acquisition of larger assets.
Passive
Relax and enjoy the benefits of owning real estate without the stress. We take care of all aspects of the project from acquiring and managing to dispositioning.
Acquisition
Stabilized, value-add assets in strong developing markets that have population growth, diverse employment, low crime, and a stable tenant base are selected to provide strong returns.
Reposition
The asset will be repositioned by reducing expenses and increasing the operating income. Appreciation is forced by enhancing the property, improving operations, and getting at market rent. Proper management will keep the property running efficiently thereby generating consistent cashflow.
Disposition
The property will be sold once the business plan metrics are achieved. Investors will take advantage of the long term appreciation generated and will receive the rest of their invested capital and a total return on their investment.
Cashflow
Investors will receive steady disbursements paid in quarterly distributions and can take advantage of bonus depreciation and other tax benefits. You will continue to receive cashflow over the course of the hold.
Refinance
Refinancing within the first 2-3 years can return up to 80% of the investors’ equity thereby reducing their risk while still receiving disbursements.