Have you ever heard about or explored the opportunity to sponsor a child through a non-profit program such as Children International? Contributions through these organizations change children’s lives exponentially in areas of health, education, and even safety.
As you may know, when you choose to help a child through such programs, you receive updates about the child regularly, including notes they’ve written and even pictures of them. You get to have a supportive hand in their growth from afar while never having to enforce a bedtime or wash the ice cream off the child’s shirt.
Investing in a real estate syndication is very similar in this aspect. As a passive investor, you would receive regular updates on the progress of the project after the deal closes, but you don’t have to field phone calls from tenants when an issue arises.
Typical Real Estate Syndication Communications and Touchpoints
There are 5 key communications you should receive at important intervals once you invest in a
real estate syndication. From the closing date, through the hold period, until the asset sale, here’s what to look for:
Are you considering investing in a real estate syndication but are leery that it sounds a little too good to be true? You’re not alone.
Many investors are shocked when they first learn about the potential cash flow returns they could receive through investing passively in real estate syndications.
The key, though, to putting your doubts and skepticism to rest, is to understand where that cash
flow comes from and how it makes its way from the asset itself to your pocket, and that’s exactly
what we’ll cover in this article.
If you’ve ever experienced owning single-family or multifamily homes, you know that these investments require time and energy.
Investing in residential real estate can be challenging because, typically, you as the investor wear many hats throughout the seemingly never-ending process. Responsibilities include finding the property, funding the deal, renovating the property, interviewing tenants, and even performing maintenance.
The trouble is, it doesn’t stop there. You have to repeat most of the process over again when your tenant’s lease is up.
Why Investing in Multifamily Rentals Can Be a Lot of Work
Small multifamily rentals have some advantages over single-family homes. For example, if one tenant moves out, the tenants in the other units are still there to help cover the mortgage. Plus, it’s much easier to manage one property with multiple tenants than to manage multiple properties with one tenant each.
But, even with a property manager on board to help with your rentals, bookkeeping, strategic decisions, and maintenance/repair costs are still in your court. You’re basically running a small business, which can be challenging if you’re working a full-time job.
The Case for Passive Real Estate Investments
On the flip side, there are fully passive investments in commercial real estate. These are professionally managed and operated investments so you don’t have to deal with any of the three scary T’s - Tenants, Toilets, and Termites. Oh my!
According to Forbes, once investors begin to understand passive commercial real estate investments, it’s common for them to move toward syndications. Here’s why:
One of the most common questions that we get asked is, “If I were to invest $50,000 with you
today, what kinds of returns should I expect?”
We get it. You want to know how hard real estate syndications can make your money work for
you, and how passive real estate investing stacks up to the returns you’re getting through other
types of investment vehicles.
In order to help answer that question, you should first know that we will be talking about
projected returns. That is, these returns are projections, based on our analyses and best
guesses, but they aren’t guaranteed, and there’s always risk associated with any investment.
The examples herein are only meant to provide some ballpark ideas to get you started.
In this article, we’ll explore the 3 main criteria you should look into when evaluating projected
returns on a potential real estate syndication deal.
Three Main Criteria
Each real estate syndication investment summary contains a barrage of useful data. Focus on
these core concepts: