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Good evening everyone and welcome to the Real Estate Investing for Doctors webinar. We're gonna get started here in a few minutes so we can wait for a few more people to be rolling in. I can see people still coming in, but in the meantime we'd love to hear from you. So in the chat you can let us know where you're viewing from. We'd love to see that. We'd also like to hear where you are in your journey investing in real estate. Whether you're just getting started learning or you're a seasoned investor already, we're just really glad that you're here with us tonight. Also, if you have questions throughout our time together, please feel free to drop them in the Q and A section and we'll address all questions at the end of the webinar here. Just a little bit. So with that, let's get started. We're really excited for tonight's webinar. We've got a great group of doctors that are currently on the webinar interested in learning about real estate investing and how generating passive income from real estate can help lower your taxes, stabilize your investment portfolio and help you practice on your own terms. I first want to introduce myself. I'll be your host tonight. My name is Jake Preyer and I oversee marketing and operations at Skyline Point Capital. SBC is based in Omaha, Nebraska, but our portfolio of real estate assets can be found in in some of the fastest growing metro areas across America, like Dallas, Nashville and Charlotte, just to name a few. Alongside of our investors, we've invested in over 4,000 units across the US.

If.

You'Re here tonight, like a lot of our physician clients, you may be experiencing burnout and wishing you had the ability to pull back on practicing medicine or have more control over your work life balance. And when looking at retirement savings, you may also feel like the rewards from the hard work you put in over the last few years has shrunk given the current economic climate and rampant inflation. That's exactly why we wanted to have this webinar tonight just for you guys. So let's quickly review what we're going to be covering tonight. First, we'll go through introductions. Next we'll discuss the benefits of real estate. Then we'll walk through our first case study of the night on how to lower your taxes through real estate. Then we'll review how to build a million dollar real estate portfolio in as little as five years. And last, we'll talk about ways you can get started generating passive income. So with that, let's get started. I'd like to introduce tonight's speakers and first up is Steve Navity.

Thanks, Jake. My name is Steve Navity and I'm managing partner of Skyline Point Capital. I started investing in real estate on a part time basis in 2006 with my first joint venture, a retail strip Center. Since 2006, I've spent most of my time leading my consumer products company, Tech Brands to an eventual successful exit when we sold our company to a private equity firm in December of 2021. Currently, Skyline Point Capital is invested in over 4,000 multifamily units, commercial, retail, industrial, mixed use, multifamily and retail development projects, land and an event and meeting barn venue facility. I've been married to my high school sweetheart for 44 years. I live in Elkhorn, Nebraska. Thanks for joining us tonight and we look forward to help you understand real estate investing for doctors and ways to create passive income and generational wealth. Next, I'd like to introduce Colin.

Hey, thanks Steve. My name is Colin Navity. I'm a partner here at SPC and also the founder of Leverage Rx, which is an insurance brokerage that helps doctors and their families with insurance planning. I'm a former investment banker, well versed in capital markets, specifically the debt markets, and I'm also a real estate investor with holdings in multifamily apartments, commercial and mixed use properties. I'm married with three little kids and based here in Omaha, Nebraska.

Thanks, Colin. And as I've mentioned before, I'm Jake Preer. I oversee marketing operations at Skyline Point Capital. Formerly I was a chief operating officer of a content marketing agency in Omaha. And I've grown up around real estate most of my life. And while I don't have quite the level of expertise and knowledge that Steve and Colin do, I can speak firsthand to the power of participating in real estate to help create passive income and lower your taxes. All right, Colin, we're going to start with you tonight. We have almost 150 doctors signed up for tonight's webinar interested in learning about real estate investing. But let's start with the basics. Why real estate and how can doctors benefit from having it in their investment portfolio?

Yeah, absolutely, Jake. So there's a significant amount of benefits that investors see when allocating resources towards real estate estate. I'm going to start here with some of my favorites, the first one being portfolio diversification. So returns on real estate investments, one of the best things about them is they have little to no correlation with the stock market. Now, there's also low volatility with private real estate investments compared to the broader market or other investment classes. So for instance, when, you know, stocks drop 20%, real estate investments typically continue to hold their value. They're also very stable income streams. Doctors can profit from multiple income streams from the properties. I'm going to kind of talk through three ways here real quick. First off, you have the cash flow from, you know, tenants rent that comes in on a monthly basis, typically very consistent, and you spread out specifically in multifamily among many units to really mitigate the risk. Now you have other types of income sources too, whether that's laundry income, pet fees, you know, utility reimbursements, you know, other things that you can make or other ways that you can make money outside of just the base rent that you would charge a tenant. But the third income stream comes from the appreciation in the property value. Now when you can get that out when the property is sold or refinance to get that back to the investors. Now one of the big topics today is inflation as well. So real estate investments are a great hedge against inflation. And we'll talk about this here in a couple slides. And then lastly, the tax benefits are absolutely fantastic in real estate investments. Now through cost segregation studies and bonus depreciation, investors have the ability to lower their taxable income through depreciation losses. We're going to get into a couple of case studies here in a little bit to talk more about that. But that's probably my favorite thing for high income earners is just the amazing tax benefits that you get as an investor.

That's great, Colin. Appreciate that.

Can you talk about the relative performance.

Of real estate to the market? I'm assuming most people want to know if they go this route how real estate performs relative to the overall market.

Yeah, certainly. So on this next chart you can see the comparison of the average annual annualized returns over the last 20 years between REITs, which stand for Real Estate Investment Trust, and US stock. So REITs have significantly outperformed the US stock market over the last 20 years. The gold line is showing the returns on REITs where the brown line shows US stocks. So for those of you that may not be familiar with what a REIT is, it's a publicly traded real estate investment trust. Now these are typically fairly large companies that own income producing real estate across a variety of different types of real estate assets, whether that's multifamily, apartments, commercial land, they can hold a several different types of real estate classes. But one thing to consider too, and we'll talk about this, more later, is that real estate syndications typically even further outperform rates because syndications aren't loaded down with expenses, payroll, other fees. But you can see here that this is that real estate has been a really bright spot for investors relative to the broader market over the last 20 years.

Colin, what about inflation? We're seeing massive inflation here in the US Right now. That's eating into purchasing power and even lowering real returns. How does real estate hold up in those situations?

Yeah, so Jake, as I mentioned before, real estate is a great hedge against inflation. You know, now it's all over the headlines. We've been up over 8%. And keep in mind too, with the things that you read in the news and the headlines related to the consumer price index, those numbers don't factor in food prices, energy prices, owned housing. So inflation, you know, what we're seeing here in the United States right now is actually significantly higher than what you see in the news and in the paper headlines. But what this chart is showing, the gold line, is inflation, and the chart below is the year over year percent changes in commercial real estate prices. And so as, as you can see, that gold line starts trending up. But when you look at the end of 2021 into early 2022, you're seeing real estate prices increase by double digits. So let's walk through why that correlation exists. So if you own a real estate asset that's spitting off a million dollars a year in income, if inflation goes up and you can drive your rents up 20%, you're adding 200,000 more to your income. Real estate trades are is valued on a cap rate. And so for those of you that may not know what cap rate is, it's just the operating income or the cash flow from the property divided by the purchase price. And so we're seeing, you know, multifamily assets right now, you know, Class A, which is kind of your higher, you know, nicer apartments trade around a four and a half to five cap. But let's just pretend that you were able to drive rents up 20%, got an extra 200,000 a year in cash flow, and at a 4.5% cap rate, that extra 200,000 is actually adding about four and a half million dollars to the value of that real estate asset. And so we are loving some of the inflation that's going on right now. And Steve's going to talk about that a little bit later because it's allowing us to drive rents and thus drive, you know, the value of the real estate. Assets that we hold right now.

Thanks, Colin. Steve, let's go over to you. Outside of single family homes and maybe some smaller deals, can you talk us through some of the different types of real estate investing and why you guys love multifamily specifically?

Jake, a couple benefits of multifamily real estate investing is that multifamily housing provides risk mitigation through tenant diversification and provides for faster lease rate adjustments. Why this is important is that since multifamily leases are usually 12 months, the owner of the property can quickly increase lease rates to the market rate. If you've owned property in the Sun Belt areas, you've seen rate increases of anywhere between 15 and 25% year over year. Another great thing about multifamily investing is your risk is mitigated by the diversification of the number of tenants and the example to the left. In this you'll see if you lose two tenants out of 24, that's only 8.3% of your revenue. And it will and it will have a much smaller effect on your overall income. With commercial real estate, lease terms are usually a minimum of 5 years and can be easily as long as 10 years or more. And the tenant counts in your property is lot less than multifamily. In this example, if you lose two of your tenants out of the eight total, that's that affects 25% of your revenue. And by losing just one tenant, your profitability is at risk because you have fewer tenants and they make up a larger percentage of your total revenue. And the last category I want to talk about is industrial. An industrial building may have one or a couple of tenants for the whole building as compared to multifamily. In this example, if you lose one tenant, you've lost 50% of your revenue. As you can see from the slide, investing in multifamily provides the least amount of risk associated with tenant occupancy and also allows the ability for owners to adjust their lease rates to market conditions very quickly, thus making multifamily a very logical investment.

Yeah, Steve, we've talked a little bit about the current economic challenges. Can you speak to how multifamily historically has performed in challenging environments?

Absolutely. What multifamily does and is well positioned, it's for multifamily provides consistent cash flows with strong passive income and creating cash flow distribution. The other nice thing about multifamily there is a forced value creation. And what this means is owners have more control over driving the increased value with value add strategies. And we'll talk about a couple of those. And this can be like upgrading the units with granite countertops, installing tech packages to name a few. And and by decreasing expenses on the property property like utilizing water flow restriction devices like toilets and fixtures. If you're in if you're going to be in multifamily, you need to be in the right market. The right markets occupancy is at an all time high and demand is projected to outpace supply in the next day decade. And what we mean by this people need a place to live. And if you're in high demand markets, and we'll talk about those, you have lots of wind behind your sales. I heard a staff the other day that Charlotte, North Carolina needs 25,000 more homes per year than what they're building for the next 25 years. 25,000 more homes than what they're building for the next 25 years. If there aren't enough homes available, people need will people need to rent. The other thing is that for multifamily there's an advantageous lending Even with the craziness of the debt lending market today, you'll find creative options to finance your purchase. Yes, you'll be paying a higher mortgage rate and you'll have to raise more capital as compared nine to 24 months ago. But overall the lending environment for multifamily assets is a much better choice for financial lending institutions as compared to compared to commercial and industrial assets.

So folks, overall the multifamily market trends remain very favorable for someone interested in investing in multifamily real estate. But let's review a few recent multifamily deals to see how these benefits play out in real life. So Steve, can you walk us through a few recent examples?

Jake I sure can. The first case I want to show everyone here is a small 24 unit HUD apartment we purchased in 2018 called Empire Apartments in Fremont, Nebraska. The reason for showing you this is to show if you buy it right and sell it right, you can get great returns for the investors. We purchased the property for 1.1 million and sold it in 2022 for 1.8 million for a 4.4x gain with an annual return of 69%. The buyer was from the area and wanted to take over more of the management of the property themselves and found a new property manager to work with this new owner. Thus they were willing to pay more for the property. I'm not going to say we could replicate that performance in the future, but there are black swan properties out there. If you're Patient. The next case study I want to show with you, share with you is the Lux at Indian Lake Village in Henderson, Tennessee, a suburb of Nashville. And we really like Nashville. The lux is a 94 unit Class A property that we purchased in December 2021 for 26 million. On another note, one month after the purchase we were offered another $2 million for the property. And when I say you got to be in the right locations and sub markets. Nashville is a very good market. What we liked about the Lux is that it's located in a high growth area. The tenants have higher incomes than which means they pay their bills. It's close to an interstate and only 20 minutes from downtown Nashville. It's adjacent to an outdoor mall with restaurants, movie theaters and more. And the area is well kept up. The capex budget and strategy was easily implemented. With a capital improvement budget of $670,000 dollars for both interior and exterior, we will raise the property value by another $3.8 million by just improving the property. One of the interesting things we learned from our new property management company for the Lux is that there's a trend with apartments now to put small offices in the areas of the apartment for the home workers that stay stay at home. Since our exercise room was oversized, we took some of the area and converted the area to rentable offices. This is one thing we didn't anticipate when we purchased the property and it was a great add on with additional income that we didn't even expect. The one thing we did learn between different cities is sometimes the permitting in different cities took a little longer and we took a couple more months to get this going.

Steve, are there markets that are more.

Desirable than others as what I said earlier? And talk about Nashville picking the right market. That's like a city Dallas or Nashville and the right sub market is going to be the most important. Orton first step into getting into strong deals with massive net operating income growth potential. We love Dallas Fort Worth as one of our major markets for a few reasons that you can see here. Dallas is growing like crazy. According to Biz Journals, DFW is ranked the number one best performing job market in the U.S. in the last 12 months they added over 196,000 jobs. The rent growth year over year was 16% in Q4 of 2021. To confirm that stat, we are seeing rent growth firsthand in our assets on new leases and lease renewals. The market is extremely resilient and it shows as 90% of local jobs that were cut during COVID shutdown returned by July 2021. Nashville, as I mentioned before, is another market we love. We really like to track U haul growth states that data shares where most one way u haul trips end. Nashville was number three in 2021. That tells us where people are moving. To more people means stronger demand, which means higher rents and higher values. According to the Wall Street Journal, Nashville has the second hottest job market in the United States behind Austin, Texas. There is no state income tax in Tennessee, which only includes eight other states in the US that attracts job seekers and businesses. Nashville was ranked number one to have the most economic growth in 2021. Number one is the most promising real estate market, number one in metropolitan economic strength, and number one as the top US city for job seekers in 2021. So that's a little bit why Dallas. Nashville are two examples of major growth markets we like to buy in as it sets us up very nicely for those strong tailwinds to massively assist our force appreciation model. The other cities we like are Charlotte, Greenville, South Carolina and basically any of the growing cities in the Carolinas work nicely and hopefully you can see why why we really like our rinse and repeat model and we can do this over and over again.

Thanks, Steve. All right, we've already walked through the general benefits of investing in multifamily real estate. Let's crunch some numbers and give you a more concrete example of the power of real estate. Let's first talk how you can cut your taxes with real estate. Colin, would you walk us through this first case study, please?

Yeah, absolutely, Jake. So let's take the situation of a fictional doctor here, Dr. Sam Smith. So he's a radiologist earning close to half a million a year. But he's also a partner in the practice that he's in and receives partnership income in the form of a K1 every year. So we got about 480 of earned income, about a quarter of a million of passive kind of coming through and distributions from the group that he's a partner in. And in short, he pays a lot of taxes at this income level. And this is why I love real estate as an investment class for high income earners, you get to take advantage of depreciation. So, Jake, if we can go to the next slide here. And if you're not familiar with depreciation, when you purchase or invest in a fixed asset, the government allows you to expense the useful life of that asset over a specified period of time. This is called a depreciation schedule. And typically those standard schedules are 27 and a half year for hard assets. This is just like if you own a private practice and have medical equipment that you can depreciate. It's the same concept, but this is a non cash expense that you can use to reduce your taxable income. And I'm going to oversimplify this a little bit, but let's pretend we bought a multifamily apartment complex for $20 million with a 27 and a half year depreciation schedule. We get the ability to expense a little over 700,000 each year in depreciation. So if that property is generating top line revenue of $2 million, has actual cash expenses of a million and cash flows $1 million, we can then deduct the depreciation expense to bring down the taxable income to 273,000. And so if you see those gold bars down at the bottom, that's representing, hey, we're taking the exact same fixed depreciation every single year. But Jake, the IRS also realizes that not all fixed assets have the exact same useful life. And what I mean by that is it's pretty obvious a dishwasher doesn't have the same useful life as the roof on your house, right? And so what you have the ability to do is actually itemize individual fixed assets to depreciate those over a shorter period of time. And we do this through cost segregation studies. And what that does is it actually pulls forward more depreciation into the first few years and actually creates non cash losses on the property. So going back to those gold bars at the bottom, you can see, hey, it's a little lower in the later years, but we're pulling all of that forward to take heavier losses or heavier non cash losses in the first few years. And the great thing about this, when you invest in syndications, these losses are passed through to investors in the form of bonus depreciation and can be used to offset other types of passive income you may have. So let's walk through that case study again. Same revenue of 2 million expenses, actual cash expenses of a million. So you've got a property that's cash flowing $1 million, but all of a sudden we front loaded all that depreciation and are taking a $1.7 million depreciation expense in the first year, creating losses of 700,000 that are getting passed through to the investors that participate in this deal. And it's a completely legal mechanism to offset other sources of income, lower your taxes, and most importantly allows you to increase the velocity at which your money can be invested. And Grow. And this is something that Skyline Point Capital does on all of our deals. We do cost segregation studies and we share the bonus depreciation with the investors that allows them to offset other passive income. And I should say everybody's tax situation is completely different. So I encourage you to consult with your CPA on this. But like I said, it's a completely legal mechanism that allows you to itemize and pull forward your depreciation faster. So Jake, let's go back to Dr. Sam Smith. So let's pretend that Dr. Smith invested 150,000 into a multifamily syndication that was leveraging cost segregation and passing through the depreciation. So because of that non cash loss in the first year of that we talked about on the prior slide, because he invested 150,000 in this situation, and this is based off of a recent deal that we did, Sam Smith gets to take advantage of about $121,000 in depreciation losses. So that 250,000 that he receives from being a partner in the practice that he's in is actually reduced by that depreciation that got passed through of 121, bringing his taxable passive income down to $128,000. So again, everybody's tax situation is different. But if he's paying taxes at his marginal rate, that's about 40 some thousand dollars that's going right back into his pocket that he's not having to pay for the irs. And this is something that can be leveraged by anyone in a high tax bracket that's receiving K1 income. So it's not just limited to doctors. But this is why I love real estate, is it really helps pull down your taxable income if you have other sources. Yeah.

So as you can see, the tax savings aspect of real estate investing is incredibly powerful. But that's not really the only major benefit in real estate investing. Colin, can you walk us through how someone could conceivably build a million dollar real estate portfolio in just five years?

Yeah. So let's roll right back to Dr. Smith and keep, keep on talking through that situation. So he's, he's put $150,000 investment down. Now let's pretend that that $150,000 that he invested in is doing three, three things. One, it's paying him cash on cash return. We talked about this before. So let's say it's, he's paying 8% cash on cash. So for that 150,000 he put in every single year, he's getting 12,000 because that that property is producing income that's getting paid back to him as an investor. But the investment is also appreciating. We talked about how hard assets are, you know, typically appreciate the value of that real estate is growing every single year. So while it may be 150,000 the first year he put in, if that's growing at 8% too, by the end of year five, that's worth over 200,000. And then let's talk lastly about the velocity of money from that bonus depreciation. So you can see there, he's also getting that $44,000 back. And, and that's why I love this in talking about the velocity of money, it's allowing him to speed up his ability to put his money to work quicker by pulling forward that depreciation and paying less taxes in the early years. But let's say that he does this every single year. Every single year we cut a check and invest 150k in. So in year two, he invests another 150,000 in a similar deal that pays him a similar cash return, appreciates the same at 8% each year, and gives him another tax benefit of $40,000 in that year. So he has two properties that are appreciating in value, two properties that are paying him 8% cash on cash return. And so you can see how this flywheel starts happening and it starts speeding up. And so if he continued to do this every single year, whether putting new money in or reinvesting that tax benefit, the value of his real estate has grown to just shy of $900,000 by the end of year five, he's received 180,000 in investment income from the cash coming off of those properties and taken advantage of the bonus depreciation. Every single year he put $150,000 into a new property where they were leveraging the cost segregation studies and front loading the depreciation. So this is why I love real estate investing. You get cash returns, the value of your properties appreciates and the benefits are completely unique when it comes to taxing and kind of how you can get creative here with pulling down your taxable income. And then lastly, let's just walk through, this is the actual financial return here. So at the end of this, you can see when you kind of take all of those things into account, the IRR annualized return is about 42.3%. Not taking into account any, you know, fees on selling the properties or any, you know, taxes coming off of that. But Jake, I don't know about, you I've got an IRA. I've got a 401k. Those things are not giving me a 40% return.

No, not at all. Thanks, Colin. As you can see, it's. It's not hard to see why people often talk about the power of real estate. But Steve, at this point people are probably wondering what are some of the ways that they can get started investing in real estate? Can you walk us through that but as well as help us understand the differences between a passive investor and an active investor?

Absolutely, Jake. There are endless ways for doctors to get started with investing in real estate. But before we jump into how to get started, let's discuss the difference between passive and active investing. Passive investing is extremely simple and does not consume a lot of time or effort. Whereas to successfully be an active investor it takes years of experience, a serious time commitment and you need deep relationships with brokers and lenders. Take a look at the chart on the slide to see the main differences between the two. I'm going to start with passive investing. There are really two responsibilities that passive investors have. Number one is understanding the investment and making sure it is the right fit as well as vetting the team you are investing with. The team is one of the most important pieces of the puzzle. Number two is looking over the monthly updates and financials. A thorough update should be written up by the general partners each month, making it easy for limited partners to understand exactly what is going on with their investment without needing to dive into the financials. Now you can see the responsibilities of an active investor on the right hand column. In order to be a successful active investor, the general partnership team and active investor needs to assemble the team. This consists of the property management team, legal firms, CPAs, cost segregation specialists, contractors, brokers, etc. You need to develop the relationships with all of these team members and vet them properly to make sure they are a class team. Active investors underwrite likely hundreds of properties a year, flying into different markets to tour the properties before offering any Lois on the asset. They are going to be developing a business plan for each property that is offered on, which is crucial that it it's very crucial that it's done properly. They should be completing due diligence which should consist of everything included in a business plan, shopping competitor properties, doing lease audits and reviewing all due diligence documents and contracts. An active investor obtains the financing and is a guarantee on the loan. They sign on the loan, review monthly financial statements and communicate with the property management team about the corrections or concerns needed to be addressed. You have to oversee the property management team and the physical asset, making sure everything is done properly. An active investor has to implement the business plan, keeping pulse on the market around where the property is located so they know when to finance and sell at the best possible time to get started in real estate investing, first off, you can personally invest on your own and an example of this would be buying a single family rental property. The issue with this, the issue with going with this route, it is very tough to find great management for single family rentals. And if you want a duplex, which is considered a small family property, it's difficult to find property property managers for that too. Also, the reason the risk increases because you can't spread vacancy and expenses among many units like the larger multifamily properties that I talked about earlier. Secondly, I don't know many doctors that have excess time on their hand. Owning a single family home may require the Dr. Investor into performing maintenance, collecting rents, evicting tenants, marketing the property, etc. I want to tell you a story that just happened this week. We are doing some remodeling on our house and one of the carpenters on our project told me he owns a single family rental house. He came to work this Monday with his arm in a sling. He told me that he went to a single family rental on Sunday to evict the tenant and ended up getting pushed off the deck by the attendant. By the tenant. He called the police, he had to go to the hospital. He ended up getting an MRI and now has limited use of one of his arms and thus he has limited his ability to earn income. The second route would be to passively invest in the syndication as a limited partner. Going this route allows you to take in part all of the upsides that real estate has to offer and allows you to piggyback on others experience.

Yeah, I think Steve, it's pretty easy to see that's the route that's most desirable. But we've heard this term syndication a couple times. What does it mean exactly?

A real estate syndication, simply put, is when a group of investors pull their capital together to jointly purchase a large real estate property. This allows investors involved to be able to take advantage of the economies of scale and also allows the limited partners to piggyback off the experience of the general partners. For syndications that we offer, we typically form an LLC that owns the partners property and all the partners. The general partners and the limited partners are all owners in this LLC together. It's a very simple structure.

So Steve, how does someone qualify to participate in a syndication like this, there.

Are two ways to qualify to invest in apartment syndications. The first way is to be a sophisticated investor. What this means that you that you must have sufficient knowledge and experience in business and financial matters to make you capable of evaluating the merits and risk of a prospective real estate investment. The second way is to be an accredited investor. The ways to be qualified as an accredited investor are you must earn an income that exceeds $200,000 a year for yourself or jointly with a spouse. It is $300,000. This needs to be the case for the last two years and is expected moving forward to be the same thing in this year. Or you could have a net worth that is over a million dollars alone or with a spouse, but you must exclude the value of your primary residence.

So Steve, is there is Are there certain types of money in accounts that you can use to invest in syndications?

Absolutely. There are several different avenues to invest in real estate syndications. The most common ways to invest is with cash. With a cash investment, this simply means that you're using your cash to fund the investment. But let's let's Discuss self directed IRAs as they are a great way to get funds out of the stock market and into real estate without experiencing penalties. A self directed IRA is a type of IRA that can hold investments that a typical IRA cannot, such as real estate. If you have an IRA set up already, you can easily transfer the funds from your first or I'm sorry, from your current custodian custodian such as Fidelity or Vanguard to a custodian like Quest Trust company that allows investments into real estate. Keep in mind that it will likely be required that you transfer your funds to the new IRA company as most large IRA companies do not invest into real estate. So you need to take advantage of a specialized self directed IRA company. This typically takes a week or so to complete the transfer, so it's highly recommended that you have to transfer that you have the transfer completed before you are needing to invest the funds into a project. Now there are a couple more notes on self directed IRAs. Typically there are typically no penalties for transferring the funds over to a self directed IRA company like Quest. Also, the fees are very minimal and you can let the funds sit in the account while you find the right time to invest so you don't have to be on a time crunch if a property comes up because your funds will already be there.

Thanks Steve. Thank you for walking through the unique opportunities with using a self directed IRA to fund a deal like this. So at this time, we're going to actually move into questions and answers. And so if you'd like to ask a question, you can do so by typing it in the Q and A section. But as we're waiting for questions to come through, I'll start by mentioning that if you're interested in participating in real estate syndications, you can visit skylinepointcapital.com There's a little yellow button right there on the homepage that says invest with us. If you fill out the form, Steve or somebody from our team will follow up with you and share more about participating in some of the opportunities that are coming up here soon. It'll give you a chance, really, to ask additional questions. There's no obligations. It's just an opportunity for you to learn more.

All right.

And with that, let's get started with Q&As. So, number one, what's the biggest thing you wish someone would have told you at the beginning when investing in real estate? And Steve, we're going to start with you on this question.

Jake I hear this question over and over and what I hear from people, and I wish this someone had told me this, I wish I would have started investing in real estate sooner. There was always some reason, there was always something going on that took more precedence. But that's what I hear. I wish somebody would have said start investing sooner. And I wish I would have started learning to do that.

Yeah, that's a common one. What about you, Colin? What do you hear?

You're muted.

Hey, thanks. I was going to say, I would agree with that. And it sounds cliche. You know, I'm 34. I wish I would have been doing this in my twenties. But I also think, think, too, when you think through, you know, the amount of effort that it takes, it's really not a whole lot different when you think through, you know, economies of scale. And so when you can get to piggybacking off of, you know, larger deals where you may not have to put as much effort in and get the exact same returns, I wish I would have realized that sooner.

That's really good. So for, for limited partners like these physicians, do limited partners guarantee the loan when investing in a syndication? Steve?

Jake, absolutely not. The limited partners don't have any liability with the mortgage. They're not signing on the documents. It's the general partners that are responsible for paying back the loan.

So what are the typical minimum maximum investments for a syndication deal, Colin?

Yeah, so typically minimum syndications are right around 50,000. You can see them anywhere from 50 to 100,000. But typically there's no maximum investment at all.

Okay, it was great. What are some of the biggest risks to real estate? You kind of touched on this, Steve, so can you kind of you follow up with that? Yeah.

Jake, like I said earlier that when you're investing in real estate, you want to be in a high growth market and then, then in each city like Nashville. That doesn't mean all parts of Nashville are great. Then you have to find the sub markets that you need to be in there and it is crucial. The second thing is you've got to make sure you're investing with the right team. The location and team are everything in real estate. And regardless of how good the team you have, if you purchase an asset in a poor performing market, you're likely not to go, you're not likely not to see success. You need to make sure that you have a solid team and you are in the right markets.

Absolutely, absolutely. What's the process to sign up for syndication deals? What does it look like?

Colin, we've talked about that a little bit.

Can you go a little bit more.

In depth of that?

Yeah. So just like you said earlier, if you go off to Skyline Point Capital, Steve or somebody from our team will schedule a call for about 15 minutes just to get to know you better, understand your environment, investment goals a little bit. We'll put you on the list for future deals, but we go through pretty stringent due diligence and so we share all that documentation with you. Everything related to the financials of the property. You know, if it's in a market outside of where we are, you know, our team is flying out to actually look at the asset and make sure that we know exactly what we're buying and that the business plan fits it. But all that's completely transparent and, but you can kind of start that by reaching out to a member of our team. Just give us the opportunity to get to know you a little bit better and yeah, join, join the deal list.

That's great. Colin, back to you. How often do we see deals like the ones we reviewed today?

Yeah, so it's really market dependent. So last year we acquired four properties. This year we've done a few. Tom were honestly really excited about how the market is kind of trending up with inflation going up, with interest rates going up. We think that there's going to be a lot of fantastic deals in the near future. We don't chase deals. We make sure that it's something that fits our investment criteria where we're going to get a really solid return. So it really just depends. We're not out there trying to do things on a monthly basis. We want to find revenue, really quality assets that are going to produce outsized returns for us and our investors.

That's great. So I know everybody's thinking this question, so I'm going to go ahead and ask it. How much do you guys actually invest in each one of these deals? And Steve, I'm going to let you.

Take that one, Jake. People, people ask that. But one of the first things I want to say is that when we look at properties, we buy properties that we want to be an owner in. We want to be part of this team. So anywhere we will invest anywhere, it could be 8%, 15%. But the last deal, the GP team that we just got in was Keystone Farms in Nashville. We put 2 million in the deal. So we want to be owners in the, in the properties that we take the syndication.

Yeah, yeah. You have skin in the game in every one of these deals.

Absolutely.

With interest rates rising, do you feel concerned about the value of these deals that you're bringing to investors? And Colin, I'll let you tackle that one.

Yeah. So we, you know, in these markets with the right debt, you know, when we talk about right debt, we try and use, you know, fixed interest rate debt wherever we can to really hedge, you know, the situations where interest rates spike. We're seeing right now other investors that have bought properties with variable debt a year ago that are getting absolutely smashed right now and having to fire sale properties because, you know, they, the cash flow doesn't work. But the other thing too about interest rates is it actually drives people that would be home buyers back into renting. And so when you kind of look at rising interest rates, rising inflation, these are really good trends that are playing well into multifamily investments. Plus, you know, rents are going ballistic right now. I mentioned that earlier, expenses are rising too, but the, the rents are rising quicker than, than expenses. Specifically in the markets that we talked about, Nashville, Dallas, Charlotte, you know, some of those real really fast growing cities are great, great markets right now.

That's really good. I want to ask a question that would probably help a lot of these potentially new investors that we have on tonight. So what's the biggest mistake that you see real estate investors making today, Steve? I'll let you handle that one.

With the crazy debt market, sometimes I see some of the capital teams want to put it, want to get as much leverage as they can. And to me that creates risk. We like fixed debt as much as we can, and we want to be able to capitalize as much as we can. And the second thing is buying in low growth markets from that side because higher the growth, higher the market, and the higher the growth, it gives you more wind in your sales. So just buying something in a market to do something with max leverage, if that's kind of what people are looking for. Skyline Point Capital is not that person and it's not that team. We want to buy. We want to buy great properties with great potential returns in the right markets.

That's really good. We're coming up on the end of the hour. We want to respect and honor based time. I know it's late, but Colin, Steve, was there any questions that we missed before we wrap up?

I think we've hit all the ones that I've seen in here. Again, if there's interest in talking with a member of our team, we are super low pressure. We want to help educate you to see, hey, if real estate is an asset class that you want to diversify into and if Skyline Point points the right team, there's a lot of great other, you know, syndication teams out there. But yeah, we're excited to chat and, you know, be a resource for you.

Yeah.

All right, everybody, thanks for your time tonight. We hope this helped each of you take a step closer to investing in real estate. Like Colin said, if you have any further questions or you'd like to connect with Our team, visit skylinepointcapital.com Click on the Invest with us and we'll take it from there to schedule some time with you. But thanks again, everybody, and have a wonderful night.