The 3 Unbelievable Advantages of Multifamily Syndication

[Bronson Hill]

The richest people in the world are those who are able to make their money work for them and grow even while they are asleep.

While there are many investment options like Stocks, Certificate of Deposits, and Bonds, investing in real estate is the best.

You may ask why.

Well throughout history, real estate investing has offered some of the most consistent and steady returns on investment. It works for many people, especially if you are one of those who are looking to put their hard-earned money to use.

Even in real estate, you will find different options but the one that works best for most is multifamily syndication. It is lucrative, less risky and requires very minimal involvement on your part.

While real estate is a non-liquid asset, the benefits of passively investing in multi-family properties through real estate syndication far outweigh being illiquid.

So, let’s dive in to see the 3 unbelievable advantages of putting your money in multifamily syndication:

1. It’s a Truly Passive Income

A lot of people think that investing in real estate will be a lot of work. They think that if they invest in real estate, they are going to become landlords. They will have to worry about their properties, take care of them, attend to calls in the middle of the night and it's going to be a nightmare.

But this is only true if you invest in single-family homes. Investing in multifamily syndication is different. We are talking truly passive income here.

Whether you are working in a high demanding job, have a business to manage, or you are a retiree who would love to put his/her savings into use, multifamily real estate syndication is your best option.

How a Real Estate Multifamily Syndication Works?

In a real estate multifamily syndication, you work with a reputable sponsor or a reputable operating group that has a significant amount of experience. They do the research and buy an apartment building using money from passive investors. The profits are then split between the investors and the operations.

The best thing about investing in a real estate syndication is that you no longer have to deal with the hassle of personally managing your properties. And all the tired landlords said Amen!

The deal sponsor or the operating group covers everything from acquisition to property management to selling the property.

As a passive investor, your main role is to vet the property and the deal and make sure that the business plan makes sense. You won’t have to talk to the tenants at all. Just sit back, relax, and collect payments in the form of monthly or quarterly distributions and the lump-sum payout at disposition. Truly passive income!

A Little About Me:

I have worked as a consultant in the medical field for many years. I have seen a lot of physicians making millions every year. But this requires them to work for 60, 70, or sometimes even 80 hours a week. Their time is not their own. Can you relate?

There are even some emergencies where they have to go in at odd hours, see the patients, and get the procedure done. If they don’t do that, they won’t get paid.

Now if you want to earn this much money but don't like to work crazy hours then passive investment is your best option. You can easily get double-digit returns pretty consistently.

According to the National Council of Real Estate Investment Fiduciaries (NCREIF) residential and diversified real estate investments bring in roughly 10.5%-12% in average annual returns.

Another benefit of investing in multifamily syndication is that it is scalable. You can grow your wealth without getting personally involved and using more of your time. Most single family investors say that managing their investments (even with a property manager) takes so much time!

1. Inflation Hedge

Multifamily real estate syndications are a fantastic hedge against inflation.

How? Let me explain!

The Federal Reserve’s inflation target is 2% each year, which means over time, everything goes up in costs, including rents. The purchasing power, on the other hand, goes down by 2%.

The FED is trying to have the currency worth less and less. There is a great book on this topic called ‘’ written by Robert Kiyosaki. It is the number one selling personal finance book of all time. According to the author, cash is trash. He says that people who sit on cash and keep saving it in their bank accounts are losers.

If you are sitting with a lot of cash in your bank account and the Fed keeps on doing what it’s doing right now, which is printing trillions of dollars, the value of your cash savings will go down drastically.

The currency supply has increased by two and a half times what it was 12 years ago. Now we haven't seen any significant inflation yet, but if that picks up, owning real assets, such as multi-family income real estate, can be beneficial.

Here’s how.

When inflation occurs, it lowers the value of your cash savings and other assets such as stocks and bonds.

Now let's say you invest in the stock market and make an average of 7% a year. This means you are really getting only 5%. (because of 2% inflation)

However, real estate acts as an inflation hedge. It maintains or increases its value over time.

During the inflationary period, rents and property values typically go up. The more the inflation goes up, the more profit you get (Increased rental income + Apartment property appreciation).

Win-win situation!

1. Tax Advantages

When it comes to taxes, multifamily real estate syndication has advantages over nearly every other investment.

Deal sponsors typically perform what is called ‘cost segregation analysis’. It allows you to write off or defer a substantial portion of the money that is made through the property.

The primary goal of this study is to identify all property-related costs that can be depreciated over 5, 7, and 15 years.

Let’s say you invest $50K and make a 10% cash-on-cash return. This means you are generating an annual cash flow of $5K. All of these gains are either deferred or written off through depreciation.

The best part? You can also carry forward these losses when you sell the property and get a tax cut too.

Multifamily Syndications: The Best Investment In Any Economic Environment!

There are many choices when it comes to investing. Some yield high returns, but they are risky. Then there are safe investments that offer modest returns. Multifamily syndication is the only investment that is below-average risk and offers above-average returns. It also makes sense in all kinds of economic environments. And don’t forget the unique tax benefits it comes with. Combine all these and trust me you won’t find a better investment opportunity.