We never thought we would own a piece of apartment complexes, especially in thriving markets like Phoenix, Dallas-Fort Worth, and Houston. Becoming real estate moguls was never the Kitti Sisters’ plan. 👀
And yet here we find ourselves scaling from zero to 2,400 apartments in a different time zone that we are managing from afar.
And today we want to walk you through why we made the decision to invest, invest, and invest again, what our plan is for the future, how it’s been for passive investors of these properties, tips for choosing the right market to invest in. We’ll break down the numbers, and we’ll share why we ❤️ investing in apartment syndication.
So without further ado, let’s dive into the world of apartment syndication…
Three years ago, our dream came true. We had a vision of us living life on our terms, owning our own schedules, spending time doing what we love, which is exploring the world, and stepping away from the 9 to 5 grind. 🙌
So let’s rewind a little bit to share where this vision came from. So one day, we tuned into a podcast and the speaker was asking “What does success look like in life for you?”Was it a certain number? Is it the way you spend your time?
And we remembered looking at each other and just brainstorming how we want our lives to be more than just working our asses off, spending time with our family, and just really making financial independence a priority.
We realize we don’t have to wait to be in our 70s, 80s to make this happen. So we set out to achieve financial independence and designing life like how we envisioned.
That podcast got our wheels turning, so we started studying what wealthy people do, and what they invest in. And all the research screams >> REAL ESTATE.
But there’s a huge catch, it isn’t just any type of real estate, it’s apartment syndication.
Now, one thing that we love about apartment syndication is that it’s afforded us so many opportunities, and since we are both general partners and passive investors we have been able to help others, whom we have encountered along the way, to come to join us and live this lifestyle by design. 🥳🥳
Now fast forward to today, we recently closed our latest acquisition of 192 apartment units in Fort Worth, Texas. Now, we never, never in a million years ever thought that apartment syndication would become a part of our business or our lives. And yet, it’s been one of the most fun pieces of what we’re currently doing.
Not only do we own cash flow-producing apartments, but we get to share that with our friends, family, and our followers and create a sound investment opportunity that allows people to invest alongside us.
We have really enjoyed them, we get so many questions about what it’s like to be passive investors in an apartment complex? How do we get into it?
And so let us just dive on in.
So things that you want to consider before investing in apartment syndication are location. Is it in a landlord-friendly state? What are the economic drivers in the submarket? What’s the population growth, job growth, net migration rate? Who is on your team? Who is the sponsor, asset manager, property manager? What are their track records and experiences?
And then you want to look at the type of property. Is it a class A, class B, class C property? What kind of amenities does the property have? What’s the rent growth? What’s the economic occupancy rate? What’s the vacancy rate? 🧐🧐
Next, what is the minimum investment? What’s the holding period? What’s cash on cash? What’s the overall return for passive investors?
Now with a great team, you get to leverage their expertise, team, and time to acquire the knowledge. Many of this information is made available during an investment opportunity.
During an investment opportunity, the general partner (GP) will present the deal that they are offering, so you can better understand what you are investing in.
So our latest acquisition we closed last month (May 2021) in Fort Worth, Texas is a well-maintained property with little to no deferred maintenance. At the time of closing, the occupancy level was 93.8% now it’s 96%.
The year of construction is 1985, which means it’s a class B product with individual HVAC and water heaters, individually metered and pitched roofs. Unit amenities include washer/dryer connections, fireplace, and patio. Apartment amenities include a resort-style swimming pool, property-owned laundry, and children’s playgrounds.
So let’s talk about the impressive projected return for passive investors on this particular deal. The projected total return is 80.28% meaning if you invest $100K, you will get back $180,280 in 5 years or less. That turns out to be 14.48% IRR (Internal Rate of Return).
Wait a minute, that isn’t too bad, right? While you sleep, rest, and enjoy life your money multiplies for you. And of course, there’s a potential upside to bring it to 100-102% if we are able to reduce expenses, increase income, etc.
Now, imagine if you have a couple of these types of investments. What would your life feel like, be like, look like?Your passive investments will work hard for you, so eventually you no longer need to trade time for money right⁉️
So after our team took over the apartment complex, we’ve been working diligently to execute our business plans to hit our quarterly milestone goals.
And here’s a piece of unexpected great news, we purchased the property for $85,000 per door, now the property that is literally next door is on the market for $105,000 per door… psst… 🤫🤫 Do the math… that’s over $3.8 million gain in one month…Wowza!
Money velocity for us is very important. 🚀
One thing we want to touch on because we’ve gotten asked about it a lot and we just want to make sure people are aware that there’s absolute risk involved in all types of investment. But we deem that it’s riskier to have your money sitting in the bank earning less than 1% interest rate, while the national inflation rate is 4-5% annually.
So before any investment, we asked ourselves what is the outcome we want from this investment? Can this investment help us get closer to living our lifestyle dreams and achieve financial independence? And how sure are we to invest confidently? After all, knowledge is what will help us mitigate the risk right?
Now, investing in apartment syndication doesn’t have to be a lot of work. Over the years, we’ve created systems to manage our apartment syndication. We are shocked at how passive it has been for us.
Since we have such a great team supporting us and incredible systems that track down everything we have had such fantastic and PROFITABLE experiences not only for us alone but also for our passive investors as well. 😘 It’s now simply our joy to be able to open our incredible investment opportunity and welcome people in.
So when we look forward, what are our apartment syndication goals?
Now our plan is to continue to find more investment opportunities that will yield similar if not better returns for ourselves as passive investors in our own deals and for our passive investors.
As we continue to forge upon this journey we are looking to expand and work with more people who align with our goals.
We’re happy and content to be owning these apartments but that isn’t to say that we won’t continue to invest in more in the future. It’s definitely been an amazing experience, and one we sincerely are excited about and that we truly, truly enjoy. 😍
As we think about how many people we’ve helped and how this dream evolved from us simply wanting to own our own time, to control our own schedule, to escape the rat race. It has been such a journey, it has been such a blessing one. After helping hundreds of investors be on the path to achieving financial freedom.
If you are curious about our investor club, head over to https://bit.ly/3qprqBb there’s a form you can fill out and one of our teams will be in contact with you.
So we hope that today’s blog just gives you a little bit of insight into our apartment syndication journey and why we chose to do them and how you can invest alongside us. We’re just so excited and can’t wait to show you what apartment syndication can do for your life. We’ll see you next time…
Palmy ➕ Nancy
The Kitti Sisters