If you’ve read my other articles, you may know that Adams Investor Group puts together syndications to buy multi-family apartment complexes.
We combine our money, credit and other resources to acquire large income – generating properties so that everyone in the group benefits.
You may be wondering how syndications work and why you would want to be a part of one.
Couldn’t I just go out and buy my own property?
Certainly you can. Of course, if you’re looking at big apartments, you’re going to need a seven figure down payment.
It also helps to have some experience when you go to the banks or hard money lenders and ask for funding.
When we choose to work with people at Adams Investor Group, we generally have a minimum requirement that you come to the table with $100,000 in investable cash – be it actual money in the bank or perhaps a self-directed IRA.
So let’s break it down for you and compare the syndication vs. doing it on your own:
Putting the group together
Without going into excruciating detail, this is generally how we pool our resources.
We form a limited liability company (LLC) where you and the other investors are members and Adams Investor Group is the managing member.
We buy the property in the LLC.
For example, let’s say that we’re buying a 200 unit apartment complex and we need $1 million for the down payment.
You and 9 other investors put up the cash and receive an ownership in the LLC.
As managing member, Adams Investor Group we:
- Use our expertise to find and analyze deals.
- Put the deal together.
- Manage the property and the investment after we close.
- Communicate often and make the investor experience enjoyable.
And to clarify, when I say managing the property, I don’t mean the day to day management.
I’m referring to making sure the management company is doing its job, that the property is profitable and that you get paid and so on.
You don’t have to worry about the operations – you simply get to sit back and enjoy the cash flow.
What is the syndication worth?
As a member of the LLC you are allocated your share of cash flow. You also share in the tax breaks like depreciation and you don’t have to lift a finger.
No calls about broken toilets, no worrying about evicting anyone and no hassles.
And when we sell or exchange – you take part in that profit too!
What about on my own?
Let’s look at the other side. You go out with your $100K and find your very own property – a 6 unit building.
With such a small property, normally it’s not going to have a property management company attached to it as the cost to manage smaller properties can be a significant chunk of cash flow.
So you’ll have to manage it yourself, or hire somebody – and that cuts your profits down.
And then what if 2 or 3 units are empty? That’s going to hit you hard.
This would be a good investment, but you have to do a lot more work, from finding it to closing the deal to managing it.
It’s really about what you want. When you’re part of a syndication, you multiply your buying power and reduce your risk and your headaches.
You get to enjoy all of the positives and few of the worries.
If you’re looking for a truly great return on your money, to build wealth and to get some security for yourself now and in the future – then a syndication to buy an apartment complex is just what the doctor ordered!
Please contact me for more information and with any questions.