In this post, we’re going to show you how exactly you can get started as a passive investor through apartment syndication. Plus, we’re going to get you there without overwhelm!
When you’re getting ready to totally level up your finances and investments, it can get preeeeetttty dang overwhelming to think of all of the options and focus on the right things.
Then, when you start thinking about passive income strategies and different types of investing (like apartment syndication), it’s like your brain fills up with info. 😗😗
Sound like you? We used to be like that, too.
Now, though? We’ve unlocked the secrets to passive income through apartment investing, and we love sharing how to do it with people just like you.
Are you ready to dive in? Us, too! Here’s what you’ll find in this blog:
- How to define what financial freedom means to you
- Why passive income is the best choice for you
- How to define your apartment syndication goals
- Advice to help you find the right apartment syndication opportunities
- Insight into funding your apartment syndication deal
First up… what does financial freedom mean to you?
Over here at The Kitti Sisters, we’re big believers that reaching financial freedom simply *has* to go hand in hand with understanding why you want to reach financial freedom in the first place. See, without understanding your “why?” it’s tough to define goals and plans that make sense for you and your unique situation. Plus, different goals often mean different things for your passive income number in the first place. ✨
So, we want you to ask yourself:
What does financial freedom mean to *me*? 🤔🤔
Maybe it means more time to travel. 🏝️🏖️☀️ Or, maybe it means more time with family and friends. Maybe it means peace of mind. Heck, maybe it means more control of your time. Maybe it means a more secure future.
No one can tell you what, exactly, your financial freedom goals should be… and that’s what makes them so special in the first place.
Why passive income is your best choice for reaching financial freedom
When it comes to financial freedom, there’s no better way to reach it than through passive income — and, more specifically, passive investing (like apartment syndication)! See, passive income is what gets people to reach their financial goals. Passive income is how you grow serious wealth without putting forth serious time, and it’s how rich people get rich. 😵😵
In terms of apartment syndication, you can be a complete and total passive investor. You don’t have to be involved with the property (no landlord duties over here 😌), and you don’t have to deal with tenants or management or anything of the sort. Instead, you pool your money with other investors and get the opportunity to participate in big deals.
It’s that simple — and it’s the best.
3 Steps to Start Passively Investing with Apartment Syndication (No Overwhelm!)
There are 3 steps we recommend focusing first over anything else knowing 〰️ your goals, finding the right apartment syndication opportunities, and funding your investment.
Here’s what you need to know:
Step 1: Define your apartment syndication goals
Before you put down any apartment investment (because, let’s be honest… apartment investments can be a lot of money), you need to make sure that the investment aligns with your goals. Are you wanting cash flow now? Are you wanting wealth accumulation? Or, are you wanting something else entirely?
It matters. We promise. 🤟
See, the first goal for both of us with our initial investments was to reach total income replacement in 10 years. Once we invested and really honed in on our strategies, that timeline dropped to 5 years – and we were able to mix and match our investments with that in mind. Without understanding our goals, we would never have been able to do it so strategically.
It’s also helpful to establish your Freedom Metric or the number you need to reach each month, quarter, and year to passively cover all of your expenses — AKA, your financial freedom metric. Then, you can weigh this against your investment time horizon, which is the time an investment is held until sold.
(Psst 👉 in apartment syndication, this is typically a 3-5 year investment time horizon… which is something to think about.)
When you start in on the passive investing game — apartment syndication included — finding the right opportunities is crucial. This means that you need to choose your investment market and your investment team well, which can go hand in hand! For instance, if you’re investing in the right market alone, you’re probably 50% likely to hit your targets. However, if you pair that market choice with the right team, you’ll get a lot closer to that 100% mark.
Now, as a passive investor, you don’t have tons you need to do besides vet your sponsorship team — which is one of the reasons we love passive investing so much‼️
(Psst… you can download our 9 Make or Break Q’s for Vetting an Apartment Deal Sponsor right here.)
Then, investigate those opportunities
However, there are a few things to understand when passively investing so that you can understand how, exactly, your money can make money. First up, ensure that your underwriting is right (a lawyer can always take a look).
Second, understand the projected returns. This goes for your ongoing cash flow, but also deals with the profit you’ll see from the projected sale of the asset.
If you’re curious what this looks like, passive investors usually see a 20% annualized return over the life of their investment hold. At The Kitti Sisters, most of our investors see roughly 8% annually over a 5-year hold — and then an additional 40-60% upon the sale of the asset, which is usually around year 5. For our investors, it’s often possible to double their investments in around 5 years. 🙌
This is why syndication real estate is so powerful — and it’s why you absolutely need to understand the deal you’re getting into before you get into it.
You’ll also want to understand your cash-on-cash return rate, which is the rate of return to calculate the cash income earned on cash invested. There’s no real rule of thumb here, but we’d always recommend looking for a cash return of at least 7 to 9%.
Step 3: Fund your apartment syndication deal
Next up, it’s time to get your finances in order and make your investment! You have a few options here, whether it’s through cash in the bank (our most recommended), from your retirement accounts, or from something else entirely.
The right team (us, hi! 🤚) can help you get your I’s dotted and T’s crossed to a certain extent, but this is your biggest responsibility as a passive investor.
And then, sit back! You’ve freakin’ done it!
Ready to start passively investing through apartment syndication?
At The Kitti Sisters, there’s truly nothing we find more important or exciting than helping to demystify passive investing and apartment syndication. After all, we believe that investments and wealth have been made to seem WAY too confusing for way too many years… and we’re over that.
Want to come join us as a passive investor in an apartment syndication, no overwhelm needed? Click the link here and join us on the waitlist for The Kitti Freedom Club — your weapon to wealth.