How multifamily real estate investment grows your net worth
Private group investments (syndications) allow individuals to jointly purchase assets as Members of an LLC. General Partners take the lead on acquiring, managing, and selling the asset. Limited Partners contribute funds and share in the ownership, tax benefits, and profits from the deal as passive investors - and watch their net worth grow.
STEP-BY-STEP OVERVIEW
Plan and Prepare
Decide if and how much you want to invest so that you can move quickly when an opportunity is presented. To satisfy SEC regulations, you often need to have a pre-established relationship with the Sponsor.
Review Deal
When the right deal is found and secured, the Sponsor will present the investment opportunity to all Investors on the wait list. There will be an opportunity to learn about the deal details, the business strategy, and the partners involved, and to ask questions before committing to the deal and signing the paperwork to become a Member of the LLC that will own the property.
Wire Investment Funds
Within several weeks of reviewing and committing to the deal, investment funds will be due. Funds must be wired to an escrow account held by the Sponsor's attorney before the property Closing.
Quarterly Distributions
As soon as the property Closing is complete, the Sponsor will begin to execute the business plan. Quarterly distributions to Investors will begin once a substantial amount of improvements are completed and the property starts to hit profit goals. This will likely be within the first year of the deal.
Return of Capital and Sale Profit
Towards the end of the deal timeline, the property will either be refinanced or sold. This is when Investors should expect to receive most of their profits and the return of their initial investment.
Possible Continued Distributions
In the event of a refinance, Investors may receive all of their initial investment back and continue to receive distributions until the property is sold in the future. With no money in the deal and profit still coming in, these are infinite returns!