This is a YouTube video titled "Ep 17 - Funds: Syndications & Diversity on Steroids" created on January 17, 2022. It features a podcast episode hosted by Flip and Danny, founders of the Freedom Real Estate Group, discussing real estate investment strategies focusing on syndications, funds, and diversification to mitigate risk. The conversation covers pooling money for investments, the benefits of funds over single asset syndications, and the importance of consistent and diversified investing. The episode also touches on tax benefits and cryptocurrency as an example of consistent investment strategy. The content is an educational discussion aimed at real estate investors.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.
Podcast, which is called Freedom through Passive Income.
That's right. In today's episode, we are going to be talking about funds, which is syndications and diversity on steroids.
And that's funds, as in F U.
N D s. Yeah, funds. Not fun. That's fun. I'm fun.
You're fun.
Yeah, I'm fun. Yeah.
Okay, this is great. So in another episode, we've defined syndication, but let's touch on it really quick here. Syndication gives you the ability to pool your money. So it's SEC regulated.
SEC stands for Southeastern Conference. No, no, sorry, Security Exchange Commission. There we go.
It is SEC regulated because you are pooling funds. Anytime you don't pool funds and it's just you loaning money on an individual asset and it's all by yourself. You're in first lien position. We don't need the SEC at all. But in this situation, like our 384 unit in Daytona Beach. Right, right. We were raising like, I want to say, 11 or 12 million dollars for that particular property, and we had to pool many people's funds together, which made it SEC regulated. So syndication, that's what it is, just pooling money together and allows you to maybe invest 50,0001-000005-00000 in. In a pool of what is going to be $11 million. So you're having the ability to do something you could not do any other way because you are. We are pooling funds for that. So that's what a syndication is. Now, a fund is. Is used many different ways. But for this particular episode, I'm going to describe it as something that's going to allow you to diversify. So. So because that's what we're going. We're doing, right? We're doing it and we're creating more of these because instead of like our Daytona beach one, since I already talked about it, the 384 units in Florida, that was a single asset fund.
Right.
So it was one property in that fund. But in funds, very many times when you hear that word, it's typically an opportunity that allows multiple properties to go into it. So there's things called debt funds where a company can say, hey, Mr. Investor, you can invest 50 to $100,000 and it's not one property. You're actually going to be spread across maybe 30, 50 properties in this fund, which allows you more diversification because I talk to people on the phone all the time. And I say one of the reasons that we decided to do volume is because it mitigated our risk.
Right?
Right. We're going to lose money in real estate. That's a fact.
Yeah, without a doubt.
If somebody doesn't say that out loud, then be a little bit fearful and run away. You are going to make mistakes, you are going to lose money. But if we're doing 10 deals a month, who cares if we lose money on one or two? And we have lost money, but the other eight are making money. So we are mitigating our risk by diversity diversification in volume. That's exactly what we're doing here with the fund is we're taking a debt fund and we're pulling people's monies together, not for a single asset, but for multiple assets in that. Now every type of fund can be different. So what we're creating in many instances and not all of these are created. So this is just a general topic. Right. We're not, we're not offering any or not solicitating any offers or opportunities here. We're just talking in generals. There's debt funds that can have like single family and duplex type properties. And the ppm, which is a private placement memorandum, will say all this. It'll, it'll define what the fund. There's also funds that can be multiple syndications, single assets, but there are multiple of them. So this is something we're in the works of now, is talking to an attorney about creating a fund that's going to have that Daytona beach type property in it, that's going to have that senior family housing type property in it. And it's going to be multiple deals in one fund. So that 100,000 or 500,000 or million dollar investment is going across like five, six, seven properties.
Nice.
So now let's talk about the benefit of that. Well, you're spreading your risk of across locations, across asset classes. Even the tax benefits, like some of our assets have bigger tax benefits. So there's another episode. We're talking about tax benefits and we talk about the fact that we do a cost segregation study and in that cost segregation study we're getting bonus depreciation because not everything is treated the same. But in that maybe one asset gets 30%. So if you are investing $100,000, 30,000 of your $100,000 was written off as a loss because of that. But maybe another one was 50%. Right? Right. And so it's like, well, I invested in this one, it was only 30, but that one over there was 50. I wish I would invest in that. But this is a fund where all of them are in there. So you're getting the wins and that, let's not call 30% depreciation a loss, but let's just say you're getting both in the best of, best of all of them across the case. So just like us doing volume, the fund is doing multiple things so that the risk is, is mitigated and leveled off because some will perform as well as others and some will perform better than others. You're getting kind of the best of both worlds. So that's what we really wanted to state of its syndications and diversification essentially on steroids. So I don't know if there was any other notes that I wrote about this that I wanted to hit on. No, man, I hit on all of them. So I just think that, that there's power in that and people need to be educated in it. Some people are going to want to look at the investment and say, I know, I like this one. I want to choose this one. Well, great, then invest in a single asset type opportunity. But if you're like us, we're always looking to mitigate our risk. And so we're always looking to spread our investments across multiple things so that we can kind of take the average of the wins and not necessarily losses, but ones that are not performing as good as, especially in the bigger. Once you get in the bigger multifamily world, syndications of the 384 unit or big storage facilities, I don't feel like there's ever like huge losses in those. I haven't seen them personally. At the very least, when we're in the other single family stuff, you and I know we've lost $40,000 on it, but across 10, we've made a ton of money. Who cares about that $40,000? So that's the point of this, in spreading out the risk and diversifying so that you can feel good and win the best way you can. I think that consistency in investments, even we're investing in cryptocurrency. It's the last example that I'm going to give cryptocurrency. One of the things that we're doing is we're very consistently saying, hey, we're going to spend X dollars and we're going to invest it every single week, week, week, week, week. And the reason that we're doing that is because sometimes we're going to buy when it's up, sometimes we're going to buy ones down, but the consistency and the diversification that we're doing across what we're buying and how we're doing it, we're going to win in the long run. There's so many studies of being able to win when you're strategic like this. So I think that's what a fund allows you to do. And that's what we wanted to cover on this podcast. So hopefully I gave enough examples that it all makes sense. And if it doesn't, ask us questions.
Right. Keep your eye out for the new flip coin.
Oh, my goodness, we're all in trouble.
Well, we know that we talked about a lot actually here, and gosh, I mean, I don't know how many years ago a fund. Oh, wow, what's that? You know, and so there might be people listening to this for the first time going, I didn't even know that these existed. Yes. So again, make sure you join our Facebook group right up here, facebook.com forward/groups, forward/.
Freedom through passive income.
That's right. And if you're not on Facebook, we get it right down here. Freedom Capital Investments.com is our website. Make sure you love, like, comment, review, ask questions. I'm sure there's going to be a ton of questions about this one. Absolutely. Believe all the crypto questions.
We're not experts. It was just an example to show consistency of investments.
Exactly, exactly. But watch. Look out for that flip coin anyway. We like that in every episode with Invest Smart. Live Happy. Bye, everybody.
Bye.
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