Over 90% of multifamily purchases are made through a syndication. A syndication allows you to take advantage of the experience and financial strength of the sponsor and to aggregate capital among other investors to invest in otherwise unobtainable, high-value apartments with high returns.
ECONOMIES OF SCALE
Single family properties or small multifamily properties do not have sufficient revenue to hire full time staff. Because of this, owners are typically required to handle all day to day operations of the property. With a multifamily syndication, revenue is sufficient to hire full time staff to operate the property with oversight and direction from the syndicator.
We do not serve as tax strategists. Please consult your CPA for specific benefits of these investment types. Our real estate investments would generally have the primary added tax value of depreciation.
Depending on the level of the value-add component of the asset, most properties will produce a cash yield from the beginning. In some cases where the value-add component is a high vacancy rate, the strategy may require investors to accept more risk with little or no dividends in the beginning in exchange for a larger return later.
Through the life cycle of the syndication, rental income from the property pays all debt service. Upon sale of the property principal reductions will be returned to investors.
By investing with other investors through a syndicator with a proven track record, investment risk is dispersed among all the investors. A syndication allows you to adjust your investment to a more comfortable risk level.
Unlike single family homes, a multifamily apartment syndication is a business that is valued primarily by its Net Operating Income (NOI), not by property comps. Through physical and operational improvements, you can increase the value of the property by increasing NOI. All of the properties we pursue have a value-add component which provides an opportunity to capture appreciation through capital improvements or through streamlining known operational inefficiencies with current owners.
Each syndication purchases the multifamily asset through a limited liability company (LLC). An LLC provides its members with certain personal legal protections against lawsuits and personal financial liability. Consult with your attorney for specific advice on the benefits of investing through a syndication.