Your Financial Advisor wants you to gamble your savings in stock market. That’s how they make money. There is no downside protection in stock market. You can lose virtually all your money not just the gains when you invest in paper assets. You have downside protection when you invest in hard assets like real estate. Single family investing is step in the right direction but completely wrong strategy. Passively investing in apartment syndication is the right strategy.
Apartment Syndication from Start to Finish
- Market Selection
GP analyzes population growth, job growth, business friendliness, tenant-protection laws, crime, etc. of multiple cities across the country to determine the best market to invest in.
- Build a team
GP forms a team of local commercial real estate brokers, property manager, attorneys, insurance broker and lender.
- Find Deals
GP sources deals from commercial real estate broker.
- Analyze Deals
GP analyzes multiple deals to determine opportunities for value additions and projects ROI. This is arduous process. Sometimes it may take up a year to find the right deal.
- Offer
GP works with seller’s broker to make an offer on the deal. Highest bidder may not always win the deal. Experience is usually bigger factor.
- Signing contract
GP signs binding contract. GP has to risk non-refundable earnest money in a competitive market.
- Due Diligence
GP hires professional contractors to do physical inspection of the property. GP checks rent collections, expenses, occupancy, etc. GP also checks for title disputes, outstanding fines, etc.
- Raising Capital from LP
GP lays out business plan for LP. Goes over return projections. Discusses specific risks and mitigation plans. Answers LP’s queries.
- Securing financing
GP works with lender to negotiate best financing terms. GP needs to meet stringent personal net worth and liquidity requirements to qualify for agency loans.
- Close
GP closes the deal and takes over operations of the property.
- Execute the business plan
GP works with property manager to execute the business plan.
- Sell
GP sells the property upon executing the business plan. Sale proceeds are distributed to LP. Partnership is dissolved.
Passive Multifamily Investing is Ideal
Passively investing in apartment syndication is safer, gives higher returns, isn’t subject to stock market fluctuations, and doesn’t cost too much time. It’s an ideal investment! I know how it feels to have savings sitting in bank account earning next to nothing, or subjected to stock market volatility. I struggled with it until I discovered passive multifamily investing.
P.S. High-paid professionals are always wondering where to invest their savings. They don’t want to take more risk with stocks because they already have lot of money invested in stock market. Not knowing where to invest, they end up with lazy money sitting in bank.
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