All Forum Posts by: Bronson Hill

You can register on this event: https://event.webinarjam.com/c...

On September 22nd, 4pm-5pm, PST, I am hosting an event,
" Inflation -The End Game " with Jason Hartman, Brien Lundin and Rick Rule

Here are some of the things we will address:

- Why are most people unpre

pared for inflation and why is it important to talk about?

- Why are precious metals a consideration in times of inflation?

- How will the US raising rates impact inflation and asset prices?

- Do any of you believe deflation will happen BEFORE inflation? Why?

- What are the best asset classes to consider? (Mutlifamily RE, Precious metals, crypto,etc)

- What is your take on crypto? Which one?

- How much of their wealth should individuals allocate to different asset classes to hedge against inflation?

- What do you expect to happen in the stock market over the next couple years?

Sign up now and join this amazing event!

“Should I Invest in This Deal?”

How you answer this question will have a dramatic effect on your investment returns. Investing in this deal or choosing that one. How do you know which one you should go with?

Here Are Some Things You’ll Learn About Great Real Estate Deals at This Event

1. - Conservative underwritten (Not just a sponsor SAYING it’s conservative)
2. - What to look for in a sponsor’s track record
3. - How to not be fooled by some sponsors lofty projections
4. - Specific steps you can take to protect yourself
5. - Best in class deal sponsor practices
6. - How to find great deals (that your friends will be jealous that you found instead of them)

Join us for the monthly Bronson Equity Investor Panel with Mark Kenney, Brian Briscoe, and Cody Laughlin. This panel discussion will be packed full of value for you and your investments and you won’t want to miss it! 
This is a FREE Event! Register now! 

https://event.webinarjam.com/channel/GreatMultifamilyDeal

You can join us in this event: https://event.webinarjam.com/r...

What's the Best Investment Now?

“Bitcoin, Gold, or Real Estate?”

40% of all US dollars were printed in 2020…. What are you doing with your investments to prepare for inflation?

If you don’t prepare for an inflationary investing environment, these negative things can happen to you:

• - Losing HALF of your net worth (or more)
• - Loss of purchasing power and real wealth
• - Underperforming investments
• - Dealing with the regret that you didn’t take action

So - What do I do with my investments and how do I protect my wealth?

3 Amazing industry leaders are going to debate which is the best investment RIGHT NOW:

• Kathy Fetke - Real Estate Expert -
• Johnny Colwill- Crypo Currency Wizard -
• David Morgan - Precious Metals Guru

Join us for the monthly Bronson Equity Investor Panel with real estate expert Kathy Fetke, Crypto currency wiz John Colwill and Precious Metals Guru, David Morgan. This panel discussion will be packed full of value for you and your investments.

Register Here

Bronson Hill & Team are pleased to present their latest passive investing opportunity.

Join us this Monday April 19th at 5pm PST | 8pm EST for a free, LIVE webinar with Bronson Hill.

Location: Online (register using this link)

Speakers:

BRONSON HILL - CEO of Bronson Equity

BENJAMIN INMAN - CEO, Inman Equities

IAN DJURIC - Managing Member, Djuric Family Offices

What to expect:

This event is for investors who would like to learn more about passive investing opportunities through Bronson Equity. We will be walking through this investment in detail and answering questions from our investor network. We encourage the opportunity to walk you through our investment thesis and how we partner long term with our investors to maximize tax advantages and deliver stable and consistent returns.

Deal Overview:

Learn more at BronsonEquity.com

• -Solid Sponsor Team with a Combined 5000+ Units and 50+ Years of Experience
• -Projected Annualized Return:18%
• -Preferred Return: 8%
• -Projected Cash on Cash (Average): 10%
• -Minimum Investment: $75,000
• -Cash or IRA funds welcomed

Disclaimer:

There is no cost to join. This event is to present an investing opportunity. This opportunity is available to accredited investors only and requires verification of accredited status - 506C offering (see here for details) Returns are projected and are not guaranteed and are subject to change. This is not an offer.

One of the best things about passive investing is that you are not the one doing the day to day work. Maybe this has been your chance to work on your golf swing!

But there is a flipside.

Since you are not the one that is actively managing your funds, there is room for error.

Your control in the deal is in the front end before you invest. Think of it as high school! The best thing that you can do to succeed is your homework.

If you don’t do your homework, it leads to the two most common mistakes that I see investors make.

Not vetting the operator and not vetting the deal.

Vetting the Operator

There are many reasons to vet the operator, but the biggest one is also the most obvious.

You want to be able to trust them!

The operators are the ones handling your investment day in, day out. They are trying to increase occupancy, doing deals, and working on the business plan.

Knowing that these are the people whose success results in your investment gain, you would want to know a few things, right?

Who are they?

What area of focus of investing do they work in? Who else is involved in the deal? What is this person’s reputation?

Just think about the kind of person you would love to be in business with, and let that be your guide.

You can also do background checks. No shame!

Remember, it is your money on the line. So be as thorough as you need to be. I know a few people that do background checks on every single partner on a deal. Do what feels right.

There is also your network of fellow investors!

People know each other, and if they have had a good or bad experience the word gets around pretty quick.

What is their experience?

Hyperfocus on what kinds of deals this operator has made.

What are the varieties of deals they make? What is the track record of the operator’s investments?

Again, use your network! Talk to your friends and see what they can help you find out.

If you can see a positive history in the operator’s portfolio, then you can feel a little safer with them managing your investment.

What is their investment strategy?

There are so many different kinds of strategies out there for passive investing. The type or class of unit you invest in, the ways to create profit, and the level of involvement needed from the investor can all vary from deal to deal.

I won’t get too far into the weeds quite yet. I promise!

What my experience has taught me, is that the best operators are specialized. Their plans are specific and clear, and you can follow what they plan to do.

You can't be all things to everyone. You can’t effectively do ground-up development, and value add deals, and work with office space, and work with multifamily, and work all over the country.

That is way too much to keep track of! Just thinking about it is a lot.

An example of a good, simple deal goes like this:

We work in the Southwest USA in secondary markets. We look for X% of returns. We're looking at B and C class or working-class properties. We do a value add strategy. We're trying to raise rents by $100 or $200 per unit.

Clear, yeah?!

And even better is when they can point to a history of their investments.

How would you feel if an operator could show you 5, 10, or even 20 deals they use the same strategy? Pretty darn good, I can assume!

Speak to previous investors.

Talk to people who have used this operator before. What was their experience?

One of the best things to ask is about the operator’s communication.

What was the communication when the deal went well? How about when it didn’t go well?

There are groups out there that stop communicating with the passive investors. To me, that is one of the worst things that can happen as a passive investor.

A lack of communication can lead to all sorts of problems. Think about it, if a problem arose and the operator didn’t tell you, how would that affect your investment?

Vetting the Deal

Just as important as vetting the operator is vetting the deal.

In this process, the first and biggest question to ask is whether the group or the person being conservative.

Conservative Underwriting

There is a lot to cover about conservative underwriting. Let’s try to keep it simple!

You want the deal to err on the side of being conservative.

Make sure that the deal is not just trying to show off great numbers. Some deals look good, but on a closer look, you realize the operators just made the numbers look good.

You want to make sure that the deal takes into account a healthy margin of error in its growth projections. Housing, for example, is a reliable investment plan, but within different markets, you can’t always rely on exact and organic rent increases year to year.

Rent growth

When it comes to seeing how conservative a deal is, my favorite number to look at is the rent growth.

You can tell so much about a deal from just this number!

Let’s say a specific deal is in a market where the organic rent increases are 3% per year.

Looks good right?

But a lot of operators will think if this is how rent increased in the past, then it will stay that 3% consistently.

But being conservative, you don’t rely on that number being consistent. Maybe some years there has been less rent increase. Or maybe the market appreciation has become stagnant.

By planning for such dips in rent growth, the conservative operator can better ride out these kinds of situations. This helps keep your investment safe.

This also shows you that the operator is keeping active and not relying solely on experience.

Cap Rate at Exit

The cap rate is the rate of return, the extra income you are bringing home each month that has accrued from your investment.

But If you think about it, the cap rate is like your money tree.

If your investment capital is the root and trunk of the tree, the leaves are the cap rate. We all want more green, but sometimes a bigger tree puts out fewer leaves.

When selling off your investment then, you’d want to have fewer leaves on the tree. Meaning, you got as much green out of the investment as possible

When scoping out a deal, you don’t want to assume that you will be able to sell off your investment at a more favorable cap rate.

If you can, good on you!

The conservative operator will have it planned out to sell at a higher, unfavorable cap rate than the investment was initially at. Again, this allows for a healthy margin of error.

By doing this, even if the deal doesn’t do as well as you would have liked, you aren’t relying on that income from the more favorable cap rate.

It also gives you, the investor, the confidence that the operators are not misrepresenting the numbers to make the deal look better than it is.

Extra Reserves

This one is simple. No, really!

You want to make sure the deal has a rainy day fund, a little cash reserve in case something comes up.

What if they run out of liquid cash? What if the renovations or improvements don’t go as planned?

A simple check on whether or not the deal has an extra reserve in place can show you the quality of the deal.

Make sure you understand the deal.

I am a student of Warren Buffett, and he puts it the best.

Really great, right?

You want to make sure you understand the deal and that you feel comfortable with everything involved. If you don’t understand, don’t invest in it!

Be willing to look around at a few deals. Find the operator and the deal that matches your temperament and your goals.

By taking the time to vet the operator and the deal, you are already two steps ahead of everyone that has made the mistake of jumping in blind.

To invest successfully is to understand what you are doing and to keep learning!

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.

Interested in investing in real estate, but not quite sure how to get started? Maybe you're curious about the process of investing and want to know what it actually looks like?

Potential investors have lots of questions about how multifamily deals are structured and we are happy to answer them.

If you are trusting a deal sponsor with your hard earned money, it’s only fair you understand the process accurately so you can gauge a timeline around getting your money back along with some nice profit.

So, in this blogpost, we're going to talk about multifamily syndication and how to get involved through passive investing in your first deal.

Understanding the Investing Process

Before you start investing passively in a multifamily property, you need to know the different steps, the process it goes through.

For your understanding, I have broken down the whole process into eight important steps

The Operator or Syndicator

The first thing that you should understand is that we have someone called an operator or a syndicator. This is typically a team of people who go out and find properties.

Operators are people who identify the property, look closely at the property, renovate certain things and add value to it.

Now these operators typically work in certain regions.

They work with different classes and different property sizes and this is what makes them unique. You don't want operators who are working with everything, everywhere because then they are not specialized in their fields/property types.

Let’s say you want to invest in brand new construction, then you should really look for an operator that focuses in that special area.

You also need to make sure your goals align with the strategy of the operator you are partnering with.

If you are interested in brand new construction, you need to find an operator who has the same focus as yours. Conversely, if you’re focused more on distressed real estate, doing full renovations and adding value, you want to find an operator who is aligned with that strategy.

Getting the Deal Under Contract

Once you have the right operator, the deal hunt starts.

The operators have to be really on top of their game in order to get a property under contract. Since they are working in a local market, they tend to have strong relationships with the real estate brokers. These brokers can provide them with opportunities to get the best properties on the market.

Once they find the right property, they have to quickly and accurately determine if the deal is worth pursuing.

This requires necessary due diligence. Operators will look at the property one last time, update their assumptions and adjust their business plans accordingly. If everything goes well, they will get the deal under contract.

Presenting The Deal to Investors

After the deal is under contract and the operators are sure that it’s a solid investment, they will now present the investment property to the potential investors.

This is typically done through a webinar or some sort of deal package saying, Hey, we've got this deal! We want to present it to you.

These investors can either be individuals who are willing to invest $50,000 or $100,000 or they can be individuals or large groups/organizations with hundreds of thousands (or millions) to invest.

Investors Choose to Invest

The fourth step in the process is where investors get to make a decision.

The investors will make a choice, say, Hey, do I want to invest in this deal? Or do I not? Do I like the operator? Do I like the deal? Does the business plan make sense?

For investors: Go above and beyond in your research. Ask as many questions as you want from the operator, list your concerns and review all the data and information out there in as much detail as possible. (We also have some videos coming out later discussing this particular topic in detail so stay tuned!)

Deal Closes

Now if you are satisfied with your research and are ready to invest in a deal like this, the next step is to fill out a short form telling us: “Hey, I'm interested in investing in this property.” This short form is called a “soft commit”.

After that we will send you some paperwork to sign. You will then wire the funds to us and enter into a multifamily syndication deal.

Also, the deal is not official until you fulfill all the requirements of ‘closing the deal”.

To help you understand, this whole closing process is very similar to that of a single family home transaction. For example, when you buy a house, there is a specific day when you actually close the deal on the house. You bring in certain documents, wire the funds and make sure all the requirements of a ‘closing’ are met accordingly. Same happens when you close an investment deal with us.

Operator Starts to Add Value to the Projects

The next step in a value-add multifamily real estate syndication is the part where the value is actually added.

Often the business plans call for increasing rents by lets say $100 or $200.

To do this, the operators will increase the rental value of the property by spending $10,000 or $15,000 per unit in renovations and then raise rents for these nicer units.

These renovations may sound time consuming but they end up increasing the property value significantly. Simply put, it is the ultimate strategy to add value to any type of multifamily syndication.

Based on the property and the business plan, renovations can include interior (such as updating appliances, high-speed internet), exterior and/or common area renovations, such as improving curb appeals, updating light fixtures, adding a clubhouse and more.

Investors Receive Passive Income

Once the planned renovations complete, these value-add multifamily properties start to generate a nice passive income for the investors. Please note that you won’t be getting income from day one because it takes time let's say 90 days or 180 days depending on the renovation to finish and see cash flow increase for the property.

After the multifamily apartments are updated, investors start to earn passive income through rents collected from the units in that updated property.

So there are two ways you get paid through doing a multifamily deal. The first is called cash on cash. And that's what I mentioned above i.e. the value add method.

So let's say a deal calls for 8% cash on cash. That means on average, if somebody invested $100,000, we would expect around $8,000 per year to be paid through the life of the deal.

The other way you get paid through investing in multifamily syndication is by getting a lump sum when the property is sold.

The IRR or the average rate of return in this case is the cash on cash plus any backend appreciation when the property is sold.

Total return on deal = Cash on cash + Property Value Appreciation

These are typically double digit returns depending on the type of deal.

Deal is Sold

The final step in a value-add multifamily real estate syndication is selling the asset. Most of our deals are usually 3 to 7 year long depending on the investment timeline and the deal’s performance.

But in the end, rather than holding the property forever, we prefer selling it. The investor’s capital is returned so that it can be invested into another project.

So there you have it. These are the important steps of a multifamily syndication deal.

As a passive investor, you don't have to worry about doing a single thing in any of these steps. However it is important for you to understand how the investment process works and what to expect from a value-add multifamily syndication.

Ever wonder what is the right thing to do with your money?

Do you have any investment strategy?

Are you sick of the volatility of the stock market?

If you are looking for investment options during these uncertain times, then you have come to the right place.

In this article , I will share the whole other way of investing that will give you better returns without the volatility.

It's been said that history doesn't repeat itself, but it does rhyme.

Just like the other black swan events, no one could have predicted the coronavirus pandemic. These unpredictable events brought many uncertainties and a lot of volatility to investments, particularly the stock market.

Now the stock market has a . The returns over time are okay, but with the volatility, you end up losing a lot of your gains.

The whole idea of investing in the stock market is to just buy and hold for the long term. This long-term approach helps weather some volatility, but if there is a 50% decrease in your investment, then you have to increase by a hundred percent just to make up the losses.

In March 2020, there was a in many of the indexes. It recovered but there's a lot of volatility. And with the current situation we are in, we just don't know what's going to happen.

If you look at the stock market data from 1965 to 2018, you have just over a 6% average annual return. On top of that are the excessive fees, which are around 1.5% per year for a mutual fund or other sorts of fund.

If you have someone who manages your investment, the money guy will take 2% and other hidden fees as well. Whether they're disclosed or not, they end up being typically 4-5.5%.

So, basically, most of your money is gone. Wow! Isn’t that a bummer!

So what to do now?

Answer: Multifamily investment properties!

Let me explain!

Andrew Carnegie, who was one of the wealthiest men of his days back in the late 1800’s, said "90% of all millionaires became so through owning real estate."

Multifamily property investment is the best investment where you can get better returns without the volatility experienced in other asset classes.

However, there is a misconception when it comes to real estate investment. Immediately, what many people think is that they need to buy rental houses and become a landlord.

Maybe you've done that and you've realized that it is really a tough job to do.

But there is more to real estate investment and you can really have something that is a much more passive investment.

Yes, you read it right - REAL PASSIVE INCOME!

The amazing thing about working with multifamily passive investing is that there are many groups out there that are very experienced.

These groups are buying large apartment buildings, which are very stable, and they say, we want to raise money from investors.

It could be $50,000 or $100,000 (whatever the minimums are) and investors will invest. And so they'll do their diligence on the front end. And then they will share in the returns that are brought by this property.

Why Investing in Multifamily Properties Is A Better Passive Investing Option?

The idea of having a passive investment is really amazing! The hard work is finding an experienced sponsor, vetting the sponsor, and vetting the deal.

But the amazing thing about multifamily investing is that it's a consistent, double-digit historic return.

Obviously, every investment has a range of returns. We have ones that haven't performed as well, around 8 to 12% but there are also several that have performed over 30%. But it is very common that we see a consistent 12 to 20% return, which is pretty amazing.

When the stock market dropped in March of 2020, our multi-family assets didn't drop at all, which makes this asset class really unique.

Passive multifamily investing gives busy professionals a lot of passive income opportunities without managing the properties themselves.

Multifamily investing is indeed a way to get involved passively.

Multifamily investing is the most compelling investment not only during a pandemic, but also after this chaos is over.