A vlog-style YouTube episode (Freedom Real Estate Group vlog #13) where co-founders Flip and Danny introduce their first real estate syndication: a 384-unit apartment complex in Daytona Beach, Florida. They explain tax-advantaged features of real estate investing (depreciation, cost-segregation, mortgage interest deductions), promote the syndication as a 506(c) offering for accredited investors, and provide deal highlights (12% combined return split between cash flow and accrued equity, $100,000 minimum, anticipated close date March 31). The video also directs interested investors to the Money Partners → Lake Forest Apartments page on freedomrealestategroup.com for the offering memorandum, video overview, Q&A recording, calendly link and soft-commitment form.
Questions this video answers
384 units.
Daytona Beach, Florida.
A 506(c) offering for accredited investors only.
12% combined return (split between cash flow and accrued equity).
$100,000.
Hey, Flip and Danny, here we are the co founders of the Freedom Real Estate Group family of companies.
Yes. And today is episode number 13, I think. Are we sure? Yes, 13.
13 double checked.
13 of our vlog series, which is supposed to be a day in the life series of Freedom Real Estate Group family companies and its team members. And today we're going to be talking about something brand new. It's about our syndication that we're just launching and about tax free wealth.
That's right. And so you're going to see here that we have a couple iPads because sometimes when I get ready for a vlog, I write all these notes and I was like, there's no way I'm going to remember to say all this. So we're saving you a little bit of time by being efficient by having notes on our iPad here. So here we go. All right. So if you're a high income earner, which most of you are, and you're watching our vlogs because of that, or your clients that we work with, then you know, taxes are our single largest expense. Robert Kiyosaki is known well for saying there are only two certain things in life, death and taxes. And we should do everything in our power to put off both. And this is what we wanted to talk about today. So if you haven't read this book titled Tax Free wealth by Tom Wheelwright, he is Robert Kiyosaki, CPA and it's part of the Rich Dad, Poor dad series of books. I highly recommend you jump on Amazon right now as you're listening to this and buy it because I just did and I started and that's what this vlog is about today.
So we launched last week and we put out a video and I believe some emails about this. So many of you do know that we've recently launched this. It's our very first syndication deal and it's a 384 unit complex in Daytona, sunny Daytona Beach, Florida.
That's right.
And it's closing at the end of this month, end of March. And so we recently recorded a video. Like I just said, it was an overview of the deal that included a drone video over the complex that was cool. Absolutely gorgeous complex. So we want to highlight, what we want to highlight in this video is the opportunity that this presents to you, the investor now and your ability to start taking some of the tax advantages that we are talking about today. We are so excited about that, that we've opened up this new investing avenue for our clients.
That's right. So we've got two main things that we want to talk talk to you about today. I'm going to start with the first one. The first one is the the tax law is written to help you lower your taxes. Tom Wheelwright teaches you in this book that I just talked about that the IRS dedicated 99.5%, that's right, 99.5% of the tax code to help us avoid taxes and therefore increase our wealth. The government is literally encouraging us to start businesses and invest in real estate. And if you're not taking advantage of these tax breaks, you're literally robbing yourself and your financial future.
Now, the second main point is to focus on passive income. Your passive income is actually taxed less and it is a result of cash flowing assets as opposed to selling your time as an employee. Now, many people don't realize that well known real estate investors like Donald Trump and Warren Buffett actually pay little to no taxes. I think everybody knows about Trump. Many view this fact as these business owners are getting unfair tax advantages. But if more people simply understood the rules and they would want to play by them too.
Yes, that's right. So real estate investors have been given the most generous tax advantages as a true way to generate income, build wealth, while at the same time permanently lowering your tax bill. And why is that? Because it's what Congress intended in the first place. The government wants to create more jobs, provide affordable housing. And who are the people that can do that? Us, you guys, business owners and real estate investors. Therefore, we are getting the tax breaks to encourage us to create those jobs and create that affordable housing.
All right, so let's bring this home and talk to you a little bit more about the 384 unit complex that we're buying the end of this month. And we're inviting you, our investor community, to join us and take advantage of the tax breaks that are offered in this investment so you can dip your toe into this tax free wealth concept that we're talking about today. Now, before we say too much more, I do want to share that this is a 506c investment for accredited investors only. This is not an offering for or a solicitation to sell a security.
That's right. So even if you're not an accredited investor, get this book. Start learning about the ways that you can take advantage of tax breaks through real estate investing. But this offering is like you said, for accredited investors. So thank you for the legal disclaimer. I wanted to make sure that was thrown in. All right, so here's the highlights of the deal and why you should be asking us a lot more questions about it. It's a 384 unit apartment complex in Daytona beach, Florida. As flip already mentioned, it's a 12%. That's right. 12% combined return split between cash flow and equity with depreciation tax benefits. That's the key. It is $100,000 minimum investment. And our anticipated close date is March 31st of this year, so end of this month.
Okay, so let's break down that return real quick because you heard Danny right. It's a 12% combined return split between cash flow and equity with depreciation tax benefits. That's a mouthful. The first 6% is based on cash flow and you'll be receiving quarterly distributions on the cash flow until we sell the property. The next 6% return is accrued until we sell the property. So if you invested $100,000 for easy math for me, you would be receiving $1,500 a quarter for, let's say, five years. As an example, that's $30,000. And then your other 6% accrued for the five years until we sold the property. And that's another $30,000.
That's right. And so here's where the tax benefits come into play on these deals. You're going to get straight line depreciation, just like on your regular mortgage that you get on your residential house. You get to deduct your mortgage interest on these as well. So in commercial it's 27 and a half years versus 35 years in residential. So that straight line depreciation actually offsets most of your 6% gains, which means just with the depreciation from the mortgage interest. These are tax advantaged or tax free gains. On top of that, the tax code allows us to do what they call a cost segregation study. A cost segregation study is basically an engineering report that goes in and says, hey, I know that the government is giving us 27 and a half years to depreciate this asset, But I know my carpet isn't going to last 27 1/2 years. I know my appliances aren't going to last 27 and a half years. So it's an extremely detailed engineering report that costs tens of thousands to do. But it's worth it because we typically see a quarter to a third of the cost of the asset in accelerated depreciation in year one. So everybody's tax situation is a little bit different. We are not attorneys or CPAs or anything of the like. You just have to check with your accountant about what exactly all of this is going to mean to you in your tax situation.
All right. So if you are interested in learning more about this Florida apartment complex and how investments like this are how the rich get richer by lowering and sometimes eliminating their tax burden legally through tax code written intentionally for what we're talking about today, then we want to invite you to jump on a call with us. Anyone who books a call between now and the closing of this deal end of this month.
That's right.
We'll get a free copy of Tax Free Wealth.
That's right. I'm super excited about it. So to learn more, this is what you need to do. Go to our website, freedomrealestategroup.com and then you're going to see the menu bar there. One of the menu items is called Money Partners. Just hover over Money Partners and then you're going to see a drop down of two items. The second item is Lake Forest Apartments. Click on that and you're going to be able to watch our video overview. You are going to see our live Q and A call that we did with our partner, Steven. You're going to be able to download the offering memorandum. And there's a calendly link there which is linked to my calendar. And you can book a call with me or you can even on that same page, click a link to submit a soft commitment at the bottom of the page that gets the process going, tells us who you are, it verifies some of the accreditation questions, asks how much you're going to invest, and puts you in queue to be one of the investors of the ownership shares in this company that's going to own the apartment complex. And then we're going to follow up and start doing some of the confirmation of details and the paperwork and things like that next.
Well, we hope that you enjoyed it. Enjoyed this vlog episode. It's a little bit different than the other ones, but we are looking forward to doing a lot more of these in the future.
That's right. Thank you so much. Have a great day.
