Multi-Family Benefits

Multi-Family Benefits

Syndication

Over 90% of multi-family 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.

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Capital Appreciation

Unlike single family homes, since a multi-family apartment syndication is a business it is valued primarily by its Net Operating Income (NOI) not by comparables. 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. A value-add component is an opportunity to capture appreciation through capital improvements or through streamlining known operational inefficiencies with current owners.

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Cash Distributions

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.

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Market Appreciation

Our strategy is to target assets in high population areas with landlord friendly laws, low cost of living and sustained job growth. Because of this our investments typically enjoy increased income as a result of overall rent growth. Because rent growth and inflation are directly linked, this type of investment provides a natural hedge against inflation.

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Principal Paydown

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.

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Tax Advantages

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. Each investor receives a K-1 annually with your proportional share of the tax savings.

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Economies of Scale

Single family properties or small multi-family properties do not have sufficient revenue to hire full time staff. Because of this, owners are required to handle all day to day operations of the property. With a multi-family syndication, revenue is sufficient to hire full time staff to operate the property with oversight and direction from the syndicator. Although returns are similar, the investment is passive for the investor.

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Risk Reduction

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 comfortable risk level.

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Asset Protection

Each syndication purchases the multi-family asset through and 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.

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