A short vlog-style episode in which Flip and Danny (co-founders of Freedom Real Estate Group) explain real estate syndications for prospective investors. They define syndication as pooling investor capital to buy larger commercial properties (citing a $42 million apartment purchase in Daytona Beach), note use of legal documents like a Private Placement Memorandum (PPM), highlight tax benefits for investors, and contrast syndication (equity ownership, tax advantages) with private lending (debt instrument, 1099 income, secured by mortgage). They mention raising "12.2" from investors, point viewers to a forthcoming podcast with their investor-relations specialist CJ for deeper details, and close with an investment-disclaimer.
Questions this video answers
Private Placement Memorandum
A $42 million apartment complex in Daytona Beach, Florida
"12.2"
Hey, everybody. Flip and Danny here, co founders of the Freedom Real Estate Group family of companies. Companies.
And we are doing a vlog for you. It's atypical. We're usually the ones on the podcast. We haven't done a vlog in a while. But this is a. Our vlogs is a day in the life of the Freedom Real Estate Group family of companies. And it's members.
Right. And you might think it's Friday, huh? But it's actually not. I just felt a little patriotic today.
Freedom.
But today we're going to be talking about syndications. And since I know absolutely nothing about syndications, I am going to be the one asking the questions.
Excellent.
Awesome.
I'm here to help.
Good. All right, first question. What is a syndication?
Great question. So syndication is where we're going to be investing into a commercial property and we're going to allow other investors, you join with us because we're more powerful and we can do bigger deals together. So this is an opportunity where we can pool our money together, which is something that we don't typically do because this now becomes SEC regulated. So we have to follow certain rules and guidelines. But essentially it just allowed us to buy a $42 million apartment complex in Daytona Beach, Florida, because it was a syndication. We got an attorney involved, did our PPM, and then invited investors to come in and invest with us on this opportunity.
You said ppm? What is ppm?
Oh, Private placement memorandum.
There we go. That wasn't one of my questions, but.
I mean, write that down. We'll go into that on the podcast a little bit deeper.
Awesome. So what are the benefits of doing a syndication?
Okay. Excuse me, sorry. Getting over sickness. The main benefits of a syndication is the tax write offs. So whenever you're buying property, obviously you have tax benefits. In a syndication, same thing. So you are an actual investor, you in the property. And so you're going to get the same real estate benefits that you would get if you are owning the property. It's just there's a bunch of us all together owning this property together. Yes. And we all get the benefits. That's really the biggest one and why a lot of people do syndications.
Awesome. So how is it different than being a private lender?
It's the tax benefits. And that's why I said that, because, well, it's twofold. So as a, as a private lender, you're going to get a 1099 at the end of the year for your income. Your the interest that you earned on being a lender for us also, being a lender means you have a note and mortgage. It's secured so that if anything happens and the borrower defaulted, you get to foreclose on them, just like bank of America would or Wells Fargo would or anything like that. But in a syndication, you're an investor, you're one of the property owners, essentially. So what you did is you invested $100,000, you've got a class A or B share, whatever ends up being you're one of the investors that owns the company that owns the property. So now you're a normal investor of real estate. You're going to get the tax benefits and things like that, but you're not allow lender, it's not backed by a mortgage. So the same risks of buying real estate in the first place, you have that same risk. It's just you have mitigated your risk by being a pool of maybe there's 100 of us or 50 of us or whatever. So your risk is smaller because you didn't put out $42 million. We had a bank loan and then we raised 12.2. So really the risk is 12.2among a bunch of US investors. So that's the biggest difference.
Gotcha. And just about a million more questions went through my head, but we're going to cover that on the podcast.
That's right, we are recording a podcast. We're going to bring in C.J. so if you're ever talking to us about private money lending or syndication, CJ is typically the person that you're going to talk to because he's our investor relations specialist. So I'm going to feature him and let him. So I don't cough through an entire podcast. I'm going to ask him questions, let him tell you and everybody who's watching or listening the podcast a lot more about what we're going into right here on the blog.
Yeah, it sounds like he'd be more beneficial to talk to than me.
He does know quite a bit.
Well, that's awesome. Well, we like to keep these short and sweet, so we do hope you enjoyed this vlog on what is a syndication. Do you have anything else to add?
No, just our tagline, Hit it. All right.
Invest smart, live happy. Bye, everybody. Nothing on this 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 this show are not guaranteed. All investment strategies have the potential for profit or loss.
