Life is about picking the right opportunities and making the most of them.
Have you ever thought about investing in real estate, but didn’t know where to start?
If you are feeling intimidated by the risk, don’t be. It’s a big decision with complexity and potential rewards that may seem daunting at first glance, but we’re here to help simplify your path in this complex world.
Fortunately, there is another way-real estate syndication.
Real estate syndication allows you to invest with a sponsor who pulls your funds with other investors to purchase a commercial property you would not be able to purchase on your own. The sponsor runs the show, managing the day-to-day operations of the property, making it possible for anyone to invest in commercial real estate without being a landlord. All you have to do is sit back and enjoy the cash flow.
You’ve likely read countless articles on why you should invest in real estate, but how many of those include an overview of what to look for when you investigate a real estate investment?
A good deal depends on more than just the presentation of the investment. It’s really easy to feel a little overwhelmed with all the different information to sift through. I am here to make the process easier for you.
Here’s what you should be looking for in a real estate syndication deal:
●Off-market-The deal sponsor team purchased the property without having any competition on their purchase price. This means that they are likely getting a very reasonable price for it, or at least an awesome discount!
●Value-add-The general definition of value-add investment is the purchase of a real estate asset with the intent to create additional equity through improvements. The concept is simple: buy low and upgrade the asset to sell high.
●Track record-Track record can tell you about an investor’s level of experience, and reputation, and it can give you an idea of how much money an investor has made from previous investments
●Strong submarket-A strong submarket is one where the population growth, job market, and local economy are all moving in a positive direction.
●Proven model-A proven model in real estate investing would be a property that always has a renter. A property that is so desirable that it is never available because someone is living in it all the time. It’s so desirable that you could not possibly lose on it. There would always be someone who wants to live there, and you would always be getting rent from them.
●Equity multiple-Equity multiple is a metric used to evaluate the performance of your real estate investments. The equity multiple formula is simple—you just multiply the amount you invested by the total cash distributions you’ve received. Look for an equity multiple of at least 1.8x.
●Unit count-Unit count is a term used in real estate investing to refer to the number of units (usually apartments) that are available for rent in a building. What does it mean for an investment? The unit count is important because it tells you how much income the property can generate. The higher the unit count, the more money you can make from it.
The fact of the matter is, there are a lot of good multifamily investment deals out there. However, as long as you’re looking for a property that will actually get you results and make money for you, it’s important that you take your time when making your decision. You should never rush into anything, especially something as significant as choosing what multifamily investment property will make you the most money possible.
We hope you find this list helpful, and that it helps you in your decision down the line.
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