Podcast episode from the Freedom Real Estate Group explaining what real estate syndications are and why the hosts favor them. The hosts define syndications as pooled-investor deals enabling purchase of larger properties, list four main benefits (passivity, tax advantages, limited liability, diversification), and give brief personal credibility anecdotes and calls-to-action for listeners to join their groups or contact them.
Hey everybody, Flapping Daddy here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.
Podcast, Freedom through Passive Income.
Yes. And right now we're actually sitting in front of one of our favorite works of art here. This is called the noses and noses and O's. And we got this one when we got our first gold retriever. So this was us. This was our family portrait. Anyway, today's episode is real estate syndications. And what are they and why do we love them?
Me especially. All right, should we start with what are they? Yes. Okay, so syndications is real estate. Syndication specifically is an opportunity for you to pool funds to buy a larger investment than you otherwise could all by yourself. A Perfect example is a 384 unit that we purchased in Daytona Beach, Florida. We were raising 11 to 12 million. I can't even remember how much it was. But many investors came into that opportunity with multiple amounts of funding to be able to raise all of that. And now they're all a part of that deal together. So that's what a real estate syndication is now, why we love them. I put down four reasons that we love them. So it's the most, it's the most passive. So if you've seen, we've written reports about the passive income income scale, like this one's at, you know, a zero. It's not very passive at all. It's completely active. Or this one's at a 10. This is one that we would really put at a 10 for passive income investing because you're going to look at the deal or review the deal and the paperwork for the deal one time and then you're going to invest your money from anywhere from three, five, seven years. So it's literally a set it and forget it type investment. And that's what I'm finding more and more people are really wanting to do. They're wanting to find a team and they're wanting to find different opportunities in order to diversify and invest in, in long term opportunities. Some people do want liquid, it's a little bit more rare. And there's opportunities for liquid investments as well. You just have to talk to us. And that's different episodes. Right? So most passive is the number one benefit. And I want to say right here, to make sure that you're doing this type of investing with an experienced sponsor, we're going to do another episode where we're talking about, I think it's like the top X ways of bad syndications. I can't even remember the title but we're talking about some things and one is knowing who your sponsor, what is their experience. The operator is the most important piece of the puzzle. So if we were the operator, why would you trust us? Because we just flipped a 56 unit apartment complex in a year and we killed it. You want to see that? It had so many nightmares. It had drug users, it had people breaking in all the time. It had, we had to evict all. But I think two people in the matter of a year during COVID and we did not give up. We saw the worst of the worst and we kept on trudging through. That's. You want to, you want to see integrity, you want to see grit, you want to see that, hey, these people are going to get it done no matter what. And they're going to get investors money back. That's what we have. That's what we look for in other partners. So that's just something you're going to hear more about in the other episode. But I wanted to touch on it here because I don't want to say get excited about syndications and then you go invest with somebody maybe that doesn't have the experience that they should have in order for you to trust them. The second thing is a tax benefit. So in syndications, not all the time, but many times you are going to get tax benefits. So there's straight line depreciation that you're going to get that's over the course of a number of years. Typically in commercial it's going to be 39 years. But the biggie is the bonus depreciation, which is done via a cost segregation study. And that's going to allow you to take anywhere historically 30 to 50% off of what you invest as a loss, paper loss, if you will, in the first year of the investment history or lifetime. And so if you invested $100,000, that's 30 to $50,000 that you're getting to take as a paper tax loss. And if you don't need to take it all, Dr. CPA. Not a CPA. Totally not a CPA. Not a financial advisor. Take it all, it can move forward and you can take it into a future year. And you can take it against passive investments like private money lending. There's so many very cool things about this. So that's number two and why we love syndications. Number three is the limited liability. So you are limited by the amount you invest. So if you invested $50,000, that's your liability. It could have been a $12 million raise but you only invested $50,000 in that $12 million raise. Your liability is just that small piece of the $50,000. So the amount you invest is the limited amount. You're not the sole owner of a $300,000 or $13 million or $43 million property. Right. So that's great. And then the diversification. So in another episode, I don't even know if it's gone out yet. We're talking about funds. F u F U N D S funds. Not just fun, like flippy fun, but funds where we allow investors to come in and invest. And we're investing in multiple properties, all in that fund to diversify across multiple areas, multiple asset classes, multiple door levels. And each one, this one could be performing better than this one, but they're just kind of balancing each other out. That's what diversification does for all of us as investors. And we that we all seek that type of certainty in what we're doing. So even if you're not doing it within a fund itself, many times you're going, I'm investing $100,000 here and $100,000 here and $100,000 here to get your diversification across single asset entities, which is fine too. But diversification is absolutely key. And people just don't even realize how many ways you can diversify. You just have have to have a conversation with us and we can tell you all the ways you get to diversify in order to mitigate risk, because investing is risk. But how else do we retire and beat inflation but by investing and finding places to put our money so that our money is working for us in order for us to build that wealth that we desire and that passive income that we desire to have at the point where we're going to traveling and, you know, just having all the freedom that we want to have in our life. So did I go really fast?
I think. I think you covered them.
Covered it all.
Okay, so again, we hope you enjoyed that episode. Make sure you join our Facebook group right up top here, facebook.comgroup/freedom through passive income. That's right. And if you're not on Facebook, we get it right down here. Freedom Capital Investments. Com. Make sure you love, like, comment. Give us any pointers, reviews, whatever. If you have any questions about the 30,000 words that she just put in five minutes.
Yeah, the pointer is going to be. Danny, slow down.
Yeah, you can watch this at half speed if you'd like. But again, make sure you comment. Tell us any questions that you may have about this. But again. We like to end every episode with.
Invest smart, Live happy.
Bye, everybody.
Bye.
Nothing in the show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on the show are not guaranteed. All investment strategies have the potential for profit or loss. Hey, everybody. Flip and Danny here, co founders, are actually ready. It's time.
