Real estate in one of the best proven investments strategies for creating long term wealth. We all come to this realization eventually. We learn the process real estate process through either purchasing your own home or by learning alongside with a mentor or consultant.
Investing in multifamily real estate is recession tested (look as far back as 2008) as the real estate market recovered faster than the stock market when the market took a dive. Real estate investing proved to recover with more consistency than the stock market.
- Mail box money: Investing in a syndication which the general partner is performing all the upfront work and continuing the business plan till the sale of the asset. Limited partners place their investment at the beginning of the investment and reap the benefits of the shared profits through the cash flow till the sale of the. Limited partners are partial owners in the deal with equity and cash flow without lifting a finger.
- Better alternative than the stock market: The risk and volatility of the stock market may be the biggest reason why investors look for better alternatives to place their capital. Multifamily real estate investing is an investment strategy known to be less impacted by the economic market shifts. If anything, it is slowly impacted. It’s also a tangible asset and allows investors more control, appreciates over time, rebounds faster than the stock market during a crisis, consistent returns through cash flow because everyone needs a roof over their head.
- Tax benefits: The IRS rewards real estate investors with tax incentives. This is also shared with the limited partners allowing them to keep more of their earnings compared with other investment strategies.
- Learn the business: Passively investing in multifamily syndications allows you the perfect opportunity to learn the business first hand. You get to “earn as you learn” because of the simple fact that you are practicing what you preach, believe in the concept of apartment investing, share your story with other potential investors in your network all while growing your net worth through your passive investments. You get first hand knowledge of how general partners are finding deals, structuring deals, communicating with investors and how they are producing certain returns for their investors.
- A lot of work/time: Putting together opportunities to help others create generational wealth takes time and commitment. General partners have systems, processes teams, advisors and professionals in place to help navigate these waters because for the normal investor, you’re essentially creating another job for yourself. When your focus should be on investing to free up your time. Consider this: find the deal, negotiate the terms, upfront risk capital (which could be lost if the deal doesn’t go through), execute the contract for the deal, perform site visits, perform due diligence, raise the capital required to fund the deal, secure the financing, close the deal, develop and execute the business plan and budget. Manage the property management team and staff onsite. Manage communication and relationships with investors and solve any issues along the way. The time commitment alone to achieve one acquisition is substantial.
Passive investing allows you to utilize professionals and tap into their knowledge and efforts to work for you. This allows you to truly enjoy the beauties of life and spend your time doing what you were truly meant to do.
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