So, we think apartment syndication might just completely and totally transform your life, your finances, and everything else you’ve ever, ever thought about money.
In fact, we don’t just think this — we know it. 😵😵
See, we know it because we’ve seen it firsthand… in our lives and in the lives of the people who come to invest with us. Apartment syndication allows you to establish and grow your wealth in ways that other forms of investment simply can’t.
It’s so incredibly powerful that we can’t help but scream it from the rooftops any chance we get.
And, why, you ask?
Because the financial benefits of apartment syndication are insane. Truly. Next. Level. 😵😵
From the tax freedom, all the way to the wealth metric, apartment syndication and apartment investing are packed with so many financial benefits that it’s almost impossible to list them all.
We’re also big fans of education over here (obviously) 🤓🤓; and consider it one of the biggest and most important pieces of our jobs to make sure that any future investors understand the financial benefits of apartment syndication.
See, when you can truly understand why, exactly, apartment syndication can benefit you so much, you’re a lot more likely to see big results from it.
Plus, it’s fun. 🤘
Here’s what you’ll find in this post:
- How does apartment syndication work?
- Is apartment syndication a good investment?
- How can you make money in an apartment syndication?
- The financial benefits of apartment syndication
- Apartment syndication risk
Now, let’s dive in.
How does apartment syndication work?
Unlike a lot of real estates investment opportunities, apartment syndication is kinda like a group project — but it’s also one of those group projects where you can do a little bit of work upfront and just reap the good grade at the end (the best kind, ya know)?
See, apartment syndication is actually pretty simple. 😊
You, a passive investor, will pool your money together with a group of other passive investors — and a deal sponsor — to purchase an apartment building (typically, a multifamily apartment unit). Then, once you’ve invested your money, you’re free to go on about your day-to-day life. Your deal sponsor takes care of any goings-on at the apartment itself, and you just rake in passive income, as well as profit split with the sale of the property at the end of the deal.
Now, notice that we didn’t say you had to be a landlord or deal with security deposits or chase down rent from tenants. Your only job? To invest your money and then to reap the benefits. That’s it.
In fact, this is why we recommend apartment syndication so often to high-level entrepreneurs with busy work schedules and a packed calendar. You can take advantage of the financial benefits of apartment syndication without the heavy footwork that goes along with a lot of real estate investments, and the financial benefits as a passive investor are truly time benefits, too. ✨
Is apartment syndication a good investment?
Now, people ask us — and often — is apartment syndication a good investment?
Well, yes. Apartment syndication *is* a good investment. After all, if it wasn’t, we wouldn’t be spending time doing it. #efficiency ✅
See, let’s put it into perspective: over the last 15 years, the average stock market return was right at around 7% return. That sounds good, right? Well… after fees, inflation, taxes, and all of that fun stuff, the return really averages right around 2.5%.
Not so great.
Apartment syndication, on the other hand, tends to return average annual returns of closer to 10% after fees, inflation, taxes, and all of that fun stuff. HELLO. Yes, please!
Plus, apartment syndication has a lot of moving parts — and it can present a pretty steep learning curve for a lot of people. However, when you can invest with an expert team (like us), you can trust that you’re making a good investment with a team that cares about you and about your bottom line, too.
When you can do your due diligence on an apartment syndication deal and make an initial investment that you feel good about, you can take the backseat and create a stream of truly passive income that other real estate investments can’t give you.
How can you make money in apartment syndication?
If you’re wondering how, exactly, you can make money in apartment syndication, we’ve got you covered. See, there are 2 main ways you make money in apartment syndication:
1) Through monthly income from rent, deposits, etc., and
2) From the eventual sale of the property.
Unlike stocks and bonds and other types of investments, multifamily apartment syndications generate cash flow for you from month to month. Essentially, as the property generates income, so do you.
Apartment syndication risk
There are an awful lot of investments that also carry an awful lot of risk — but apartment syndication isn’t one of those. While there is always a little bit of risk involved in any investment, apartment syndication carries significantly less risk than a lot of other investments.
The reason? People always need a place to live, recession or not. When you’re investing in multifamily apartments, you know that you’re investing in something that will stay consistently relevant and important… meaning that it consistently costs money for the people that live there.
Combine that with above-average returns, and you’re rockin’ it. ⚡
The financial benefits of apartment syndication
Now, we’ve waxed poetic about apartment syndication a lot (we can’t help ourselves), but we want to make sure you can truly understand its benefits. Let’s break down why, exactly, apartment syndication carries so many benefits — and what, exactly, those financial benefits are:
1. Apartment syndication is truly, truly passive.
There are a lot of investment opportunities that promise to be passive… but actually involve and require an awful lot of work on your part. Apartment syndication, however, is 100% passive. You invest in the apartment syndication deal as a limited partner with equity — and equity in the deal is huge — but then all you have to do is sit back and go about your regular responsibilities. The deal sponsor, or general partner, is the one who has to deal with the complicated pieces of apartment ownership — and you don’t have to.
Plus, the educational value of being a passive investor is hard to ignore. As a passive investor, you can both invest in assets you couldn’t invest in individually as well as learn from a team of true industry experts. You get access to expert knowledge from fellow investors as well as access to the deal sponsors, giving you the opportunity to leverage expert time, relationships, and resources.
Win, win, win, win, win.
2. Apartment syndication is a risk-adjusted investment.
While any investment is always going to carry a fair amount of risk, apartment syndication is a really a relatively safe investment. To understand, we always recommend taking a look back at the housing market crash of 2008. When the bubble popped, delinquency on Freddie Mac single-family loans reached a whopping 4%. Delinquency on multi-family loans, however, peaked at just .4% (relatively recession-proof).
Plus, apartment syndication is not nearly as volatile as methods like cryptocurrency or stocks — and that helps… a lot.
3. Apartment syndication carries a ton of tax benefits.
One of the most truly incredible things about apartment syndication is the sheer amount of tax benefits that it can bring you. We owe a lot of this to the magic of something called “bonus depreciation,” which lets your investment income gets taxed at a *significantly* lower rate than any other investment.
Plus, you can often actually show a taxable loss that can offset other income. It’s incredible. See, let’s look at a unit we closed on earlier this year — a 192 unit property in Fort Worth, Texas. We were able to get a 112% bonus depreciation title from a third-party cost segregation study — which means that some investments are going to be shown as a paper loss in the eyes of the IRS. For our passive investors who invested $100,000 in the deal, the $112,000 paper loss can be used to offset their passive income gain.
Essentially, you’re boosting your wealth BUT lowering your taxes. Hello. Yes, plz.