Yes, with a 506B Fund both non-accredited and accredited investors can become part of the fund.
Multi Family Syndication is the type of real estate investing that focuses on two things, multi-family properties (typically medium to large multifamily properties) in combination with having a team to make it work. This team is made up of General Partners and Limited Partners. All the day to day activities and prior to an opportunity activities are done by the General Partners. This consists of finding the deals, analyzing, finding the right debt, management company, attorneys, and managing the asset making sure that not only the business plan is executed effectively but also that the limited partners are informed and distributions are done on schedule. Limited Partners are the passive partners of the syndication (property investment) and their role is to bring the capital to the deal and fund the opportunity.
Yes. Typically we will act not only as the General Partner but also believe that it is important to align our interests with our passive investors. We believe that it is important to have your own skin in the game and provides confidence, that as a collective team we will execute our business plan to maximize profits for all.
Typically distributions are given ever month on the cash flow of the property as well as when large milestones are hit such as a refinance or a sale of the property.
A REIT is almost the same thing as a stock. Stocks may provide dividends but not at the level of a cash flowing property while building equity. More importantly you can not use leverage in a REIT. Being an investor of a real estate fund gives us the ability to leverage the collective capital and utilize X dollars in capital to get a 3 or 4x valuation of a property. In turn, by leveraging money it increases the amount of cash flow, scale, and possible appreciation of the property.
As with any investment there are risks. However, we believe that real estate investing, specifically in the multi-family space has the balance of the greatest reward for the lowest risk. It is a tried and true business that has stood the test of time, even throughout Covid. We believe that if you’re in a Class C+/B or higher property, in a great location, and can force appreciate the property by value add, it is a win. Overall, the numbers speak for themselves and all investments should be treated as such.
There are many benefits as an investor, including tax benefits for passive income and depreciation, long term wealth, passive monthly cash flow, and at certain times large capital returns in the matter of a refinance or a sale of the property.
When reviewing properties we analyze how they’ve done during the height of covid. When analyzing data and we approach it very conservatively in a worst case scenario aspect. We want to make sure that even if the height of covid happened again, the property would still cashflow and succeed. What we’ve seen other investors do during this time was to hold distributions for a few months, but then to catch up once the dust settles.
In the PPM (Private Placement Memorandum) there will be specifics if you did need to exit the opportunity. This clause would be recommended for emergencies only as typically you have to sell your position in the company at a discount without any promises that it can be done. The investment is illiquid unlike the stock market.
$25,000- $75,000 for each syndication. It is dependent on the metrics on how much within this range the minimum will be.
Our target multi-family criteria that we focus on are value add properties in great locations where we have a solid team in place. Besides having the support and knowledge of a great and local team (including the property management company) we focus on 50+ unit properties in great areas where we see growth. Finding properties that can be improved to be at or excel above market rents is very important.
