Investing in apartment buildings is a business and it does take time, work and education on your part, but those efforts can result into huge success and help you reach your goals. That being said, many investors will still not take action for one reason or another, one of those main reasons is time. The reasons why most investors select traditional investments are because they are hassle free, they are quick to get into and they take minimal time. Reading this book, you now understand that apartments and commercial investment real estate is the way to achieving high returns and creating additional income streams. However, how do you counter the time issue?
This article is for those who have the desire and motivation to invest and own apartments, but would rather be as passive as possible while receiving all of the benefits of an active owner. The best way to be an owner of large portions of commercial real estate, without having to do the work yourself, is by investing in a private investment fund or a managed joint venture. These investment structures are put together by an individual or an entity referred to as a syndicator.
WHAT IS A SYNDICATOR?
A syndicator is an individual or entity that structures real estate ventures for qualified participants to invest in. Multiple investors can invest a portion of capital in a venture or property over what they normally would if they invested themselves. These investors, along with the syndicator who formed the venture, can partake in the benefits associated with the investment. Here are some of the benefits:
1) High returns, as previously compared to traditional investments, investment funds can offer good returns on investment.
2) You are building equity in larger commercial properties which will result into higher payoffs when the property sells.
3) You do not have to guaranty the debt that the fund purchases, what you typically do when buying investment real estate yourself.
4) Management and systems are in place for property management, accounting, legal and reporting; providing a true done for you program.
5) The management team is an expert in the field and you get to take advantage of their experience.
6) You can use your IRA to invest and grow your money tax free.
ROLE OF THE SYNDICATOR
The role of the syndicator is very simple; they do all the work, so you do not have to. In this book we covered specific steps to locate, acquire, finance, manage and sell apartment properties. We realize that it does take work and effort on your part to do. Working with a syndicator eliminates that. Along with all the steps necessary to acquire good apartment and commercial property investments, your involvement in the whole process is to receive your monthly cash flow checks and your owners report statement. The syndicator should provide a program that gives you the ease and comfort of how traditional investments operate. This includes providing you with the support on ways how to invest your IRA/401K.
The syndicator does his or her homework and makes sure they present quality, good return project. They work only with experienced, highly competent professionals, such as attorneys, accountants, insurance agents, contractors and advisors. The syndicator should also comply with the rules and regulations of the Securities and Exchange Commission (SEC). A syndicator should only be marketing and working with qualified accredited investors.
QUALIFICATIONS OF THE SYNDICATOR
The syndicator should have extensive experience in putting together successful ventures and have a record of those accomplishments. The syndicator of team members of the entity should have a good standing reputation and be highly educated in the syndication process. The team of professionals should also be highly qualified and should be able to provide a track record of success or experience. There are a lot of syndication groups out there, but appear to be smoke and mirrors. Anyone can put together fancy marketing materials and offering material, but may not have the expertise or experience to put together a sound venture. Be sure to check the qualifications of the syndicator and the project they are marketing. The information presented to you should be easy to understand, giving you a clear picture on the quality of the investment.
REQUIREMENTS FOR INVESTING IN REAL ESTATE FUNDS AND JOINT VENTURES
Private real estate funds are not suitable for all investors. Since real estate funds are not registered with the Securities and Exchange Commission (SEC), fund managers can only offer or sell ownership in a fund to certain types of investors. These investors are referred to as “accredited investor” or “qualified purchaser”. If you are considering being an investor for a fund, you are required to meet a minimum financial eligibility guideline in order to invest. To be eligible, you must have an individual or joint net worth of $1 million dollars or an individual annual income of at least $200,000. If you are a couple, looking to invest, there needs to be a combined annual income of minimum $300,000 for past two calendar years. Before you even think about investing into any fund, make sure to review your financial situation, your goals and objectives and your risk tolerance with your financial professional.
CLOSING
Real estate investment funds and joint ventures are a great way to be the owner of apartment and commercial investment property. These ventures allow you to have your money work for you, without any effort on your part. There are risks involved with every investment, so make sure to work with a syndicator that is experienced and presents sound projects that yield attractive returns that meet your investment objectives.
We are seeing an unprecedented opportunity for investors to earn high returns and significant benefits through the ownership of Apartment Investment real estate. If you enjoyed this article and would like to learn more about investing in apartments you can watch a FREE, No Obligation Webinar explaining the benefits of owning Apartment Investment Real Estate in further detail register here: Investing Done For You
