Why and How to Think Outside The Stocks 0318

All right, so we're going to get started. Thank you so much first of all everybody for joining. I know these are really the hard times and what we are seeing right now, it's really unprecedented. With the health crisis that's going on and with the stock market fluctuating beyond our imagination right now, this is a time that we are being at home getting some family time. There are pros and cons to that. But also at the same time there's a period of uncertainty. We don't know how long this is going to last. We don't know what the impact is going to be. So this, in this uncertain times, I really want all of you to thank you for joining and attending this livestream event. Having said that, I think this is a perfect time to start thinking outside the stocks and start education in terms of our out of stock investment opportunities. This is the storm that we are right now sitting inside and we have some time on our hands that we can start focusing on so that we can focus on our education utilize this time so when the time is right and the investment opportunity are presented to us, we can take that action. So this is a good time to educate ourselves to go through this process. So let's get that started. The topic today is why and how to invest outside the stocks. We are going to look at primarily six reasons at high level on why we need to start investing outside the stocks. One reason we can see which we are sitting right now inside of it is that some the fluctuation that we are seeing in stock market and this is high, high, really high motivation for us just to start thinking about this education. So let's get started. Before we get ahead, just a small disclaimer from my side. This livestream event. This presentation is provided for you information and education. Whenever you are investing into something, please do perform your due diligence. Please seek out for any help in terms of advising from legal, from tax professionals. We are not tax professionals, we are not any legal counsels. So, so please, please seek out for that help. But this is going to provide you a good start and good foundation in terms of this information and this education. Please also remember that some of the examples which are being used today are based on what we have seen in the past. The past performance does not determine the future performance of these asset classes. So there are so many impacted factors, right? Especially the general economy where it is going right now. We will start seeing the delayed response in the real estate for what's happening in stock market but not as much. But we will start seeing that. So just keep that in mind. That disclaimer just general housekeeping. Some rules for this live stream. This is going to be one hour. We will try to stay within the timeline, but if we have some more questions, I'm here to answer those questions. So feel free to enter that in the chat box or the Q and A box. I will take a look at it and answer the questions. You are all put on mute for this time. Just so that we are respectful to other, you know, other participants as well. So having said that, let's get started. Who can benefit from this presentation? Who can benefit from this livestream event? So first of all, if you are a busy individual, busy professional who's tired of investing into stock market was really motivated by the fluctuations that we have seen to invest outside in an alternate investment class which can provide you a really high growth. If your tax liability last year has motivated you to find out and to seek out more of these alternate options, that's you. You have never invested in real estate before but been wanting to do that, especially watching all those fix and flip shows on the TV or just going around in your city and looking at the new apartments, new self storage facilities that were coming in and just thinking in your mind that hey, I should be investing in there and just not having that enough time to research and to commit to that effort and time to invest into real estate. So in short, if you are a busy professional looking for a truly diversified high growth investment opportunities which are completely passive, right? You don't have that kind of time, you don't have that kind of effort to put in and even the money to put in that into an active investment. So passive is a key here. Passive, passive, passive investment and which also provides you a good tax advantages which is also key. And we will look into why that is in the presentation. Because without the tax advantages, whatever your gains are, if they're going to be put into Uncle Sam's pocket, most of it that just doesn't make sense. So that's basically if that's you, you're going to definitely benefit from this seminar. Moving on just a high level agenda. We will look at the reasons, we will introduce you to the syndication based multifamily investment and we will also look at different creative ways into investing into this kind of investments. And we also have a sample deal that you can look at so it gives you a good idea in terms of what to expect. So let's get started a little bit about me. My name is Madhavi Nade Jain I'm the president of Think Outside this Talks. Think Outside the Stocks is a commercial real estate focused educational and an investment company and I'm focused on data based education professionals so that they can confidently invest into outside stock investment opportunities. We also partner strategic partnership with different syndicators which we vet them thoroughly the deals as well so we can bring you this investment opportunity. So having the education is not enough. Bringing this educational opportunities is also what we pride in bringing to you, the high quality investment opportunities. A little bit background about me. I spent about 18 years in IT industry, about 16 or so in US and mostly with Deloitte Consulting in project management, which actually gives me a great background in terms of utilizing my experience and think outside the stocks and in real estate. So I can break down this information for you. I can provide this simplified education to you on what I have learned through what challenges I have faced. Little bit story about my why in 2015 I had to put a screeching halt to my corporate career because of my health conditions. And that kind of gave me this biggest why, this biggest motivation so I can start looking outside the stocks into passive investment opportunities because my health did not permit me to put put in that level of effort even though I had time. And that actually aligns pretty well with your intention of being passive. Because if I cannot do it, then you cannot do it, right? So these are the passive investment opportunities that I am bringing it to you in terms of education and the opportunities in terms of my real estate journey. I invest with my husband Piyush and I have a rental portfolio which includes single family rentals, Airbnb, which is very interesting and it's going well. It's invested in Austin, Leander and Georgetown, which is my surrounding cities. And we are also invested in 550 units multifamily via syndication in Austin, Dallas and St. George Utah market. St. George, Utah is a very interesting market. Again, I would encourage for you to start thinking outside of your comfort zone, outside of your comfort city and look at other emerging markets in and around us so that you can benefit from the growth in those markets. So let's look at the big why, right? Why we are wanting to think outside the stocks now. The American dream, it used to be owning a home. It's changing to reaching to financial freedom. A lot of people are talking about financial freedom before the retirement and just to live the life that you had been yearning for, to spend where you want to spend that time in with your family, doing travel and passing this wealth to next generation. So basically Living a life of your choices but not with your financial responsibility has been the key. That's the American dream. Changing to. Let's start looking at the high level reasons of why to think outside the stocks. And we are looking at six today. These are I think the top six reasons. There are multiple reasons, right? There are multiple reasons why we need to think outside the stocks talks. But let's focus on the top six today. Number one reason, the life expectancy. It is very surprising to see the data and I have a mathematic background. I love data. Everything determined by data is something that I believe in. Data don't lie, the numbers don't lie. So a lot of things in today's presentation we are going to be looking at the numbers which are going to support what we are thinking, trying to think outside the stocks. So in 1900 it's very surprising to see actually the life expectancy was 30 years, right? I mean people did not live longer. The average was 30 years. Really small number. But we also have to keep in mind that medical was not advanced. There are a lot of number of other reasons people were dying sooner than expected. Not necessarily just the health, but you know, there were other reasons too. And Fast forward around 1980 the life expectancy increased to 60 years and now today it's 70 years and increasing. And if you look at the chart in right hand side here, United States expectancy is little bit above the world expectancy. So we are living longer. So the fear is not that will I have money but the fear is will I have enough money to last this journey, this road. We don't know how far this long road goes. So just thinking about that, how many years I have to survive after my retirement has been the key consideration. That's the fear that's increasing. Reason number two, retirement is a moving target. It's constantly moving with the fluctuations in the stock market. I wish people had a crystal ball just before the recession if they are retiring and are about to get retired. Just before the recession or the fluctuation like what happened in 2008, individuals who are above 50, they lost their jobs. There was the numbers again. These numbers they just astonishing. 3.3 million above 50 lost their jobs. And not just their jobs but their benefits too. They had a saying during that time which is, you know, made a job out of it that their 401k became 201k. They lost so much, 2.4 trillion was lost in their retirement accounts as a result. They did not have time left to watch it grow again. They had to start taking out their investments. The baby boomers actually are going beyond their retirement age and they're still working. And these are the people who we see at the cash counters at Walmart. Greeting us is just so heartbreaking for me personally. See every time such an elderly just because they got impacted during that recession and the times that we are seeing today as well, sure, people are about to retire, they're losing it big time. And it's just scary. So that moving target of the retirement and you know how long you have to work. Still the number two reason number three reason, the health care cost. Health care cost is constantly rising. It's constantly on a rise. If you see the per capita, this is not even. We are not even talking about just the senior. I mean, as you start getting older, your health care cost is increasing, but this is just per capita. Today in nursing home care, your annual cost is about 74,000. If you are at home and you need to have age to help you, it's about 4,000 per month. And the increase is astonishing 31 times over last 40 years. So by the time we retire, this cost is just creeping up. It's not slowing down, it's just creeping up exponentially. Reason number four, the diversification and the volatility of the stock market. Have you recently been to any financial advisor? If you go, if you have a chat with them and you ask them, I want to diversify, the option that they provide will look typically like what's provided in this chart here. It looks different colors, it looks diversified, but there'll be stocks, bonds, and, you know, different options here. But all this diversification is tied to the same stock market. Unfortunately, what's ending up happening is we are putting all our eggs in the same basket. And we are having right now hard time trying to manage our basket with all our eggs in the same basket. And that's what we are seeing right now. Unprecedented times. Absolutely. 2008 saw this. We are seeing this happen. This is happening rather quickly. So sharp drop. So that diversification tied to the same volatility of the stock market is not providing us enough diversification. So we have to start thinking something outside that can manage that risk a little bit better. Reason number five, why stock market is not an answer for us. You know, there are people who are really pros in the stock market. Kudos to them. But we looked at just some historical data against number don't lie. Right. So I looked at the compound annual growth rate CAGR with inflation adjusted for the growth of the stock market now just to make it interesting, let's look at just the one year time span, right? So between January 2019 to December 2019, we applied this CAGR to stock market S&P 500. And we see it's 28%, it's 28% increase. So if we invested $1 in Jan. 2019, it became $1.28. Absolutely great growth, right? But again, the fluctuation that we saw suddenly happened today, just keep that aside for some time. You know, let's think about like that didn't happen, but we looked at the same period differently. We look at actually same number differently. We looked at January 2000 to 2019, December and we applied the same CAGR metrics to it. And we realized that if we had invested a dollar in 2000 back in 2000, it grew to $2.10. Absolutely amazing to see this that our net worth just grew almost little over double. This is not how the compounding magic works, right? I mean this is not something that we want to happen to our investments, right? So I'll just give it a pause a little bit for you to digest this information. But this is really key here that in terms of our investment to grow, we need something a little bit better just providing us better returns so that we can grow our investment a little bit better. Again, the fluctuations of the stock market is impacting it. So if you look at the left hand side and see how it has historically been fluctuating, that's what is impacting the right hand side. Again, this is inflation adjusted. Reason number six, how do we pay taxes compared to how the mega rich of America, the top 1% America pay taxes. Robert Kiyosaki, the author of Rich dad and Poor dad has this cash flow quadrant. If you haven't read the book, by the way, it's a good read. Just pick up your copy and read that book. It's a good mindset Change book. He talks about moving from the left side from S E, B to I. The goal is to be in I. That's the investor quadrant. The S is the self employed. Where you own a business, you own your job. Is most of us where we fall in? We have the employees, we are working for corporate, we are just basically employed. B is you have your own system, you have your own business, you're employing 5,500 people and the I is the investor, the money is working for you. This is the passive investor. If we consider a really high bracket of taxes for these individuals, this is how we are paying taxes in these brackets. So the self employed who owns the business, he has to pay two taxes, right? The employee, employer employee and employer taxes. So he pays about 50 to 60% the employee, we end up paying for the highest tax bracket, 30 to 40% in taxes. The business owner, they have better write offs than we that employees have. So it's about 20 to 30%. And what's astonishing to see here is the investor, if it's in the high earning bracket, they end up paying 0% taxes. And this is not an exaggeration. The 0% taxes comes from different type of depreciation, different type of passive losses that they can write off their income. And this is the intention, right? This is why what we are earning and we are paying in taxes is making an impact on our investment. I have a little illustration here. Consider that we are earning 50,000 every year and our tax brackets are different, right? Some are paying 25% on that gain, some are paying 15% and some are paying 0%. We consider that 7% compound growth for this kind of earnings. And we are earning the same 50,000 over and over again for 10 years. Just within 10 years. You can see in this chart there is a difference of $200,000 just from this tax savings. And I'm just considering the bracket 25%. I'm not even going about 25%. So this is what is impacting our investment. So not only that we need to start growing our money, but we also need to start growing our money so that our investment, the returns on our investment is not heavily, heavily taxed. And we can take that saving, put it into compound interest and earn that interest as well. So again the recap, what's stopping between our financial freedom and the investments are all these top six reasons. And this is the reason that why we have to think outside the stocks. Just going to give you a break a little bit here to focus on the six reasons. Alright, so just moving on, right? So let's really take a step back and look at what our end goal is here. What is our reasonable goal to retire so that we can focus that is 15,000 per month reasonable for us as a per month income after 15 years? And many of you will have various variations, right? Some will be retiring early than earlier than 15 years, some will be retiring a little bit later than 15 years. And that 15,000 is also fluctuating. But I'm just going to take a norm, I'm just going to take an average that, okay, 15 years, I want to make 15,000 per month passively. So that I can live my retired life and life of choices. Right? So let's start looking at what that means to what needs to be saved today. Right? So the compounding is a really magical formula. Suppose we are saving $100, we saved it for 15 years and we applied a 2% interest rate on it, that hundred dollar would grow to $182. But if you move towards the right hand side from 5% to 10% to 18%, that same hundred dollars compounded 18% over 15 years is going to give you whooping 21,000. Now that you will say that oh, that's 18% is unprecedented. That's. You can't really consider that. Never mind. Just look at what your goal needs to be in terms of 15,000 cash flow. How much do you need to start saving each month? If you are to get 2% interest every month, you should be saving 30,000 approximately to achieve that goal. That's rather impossible. But as it goes down, the interest goes up. If instead of 2%, if you target the 10% return on your investment, you need to save $2,370 every month to reach that goal. And if it goes further, it's 18%, then it's 433 is getting more reasonable. Right? So our target is to have our investments provide us returns between 10% to 18%. Again, this is just the numbers magic. This is what we have to keep it in mind. So then let's define, you know, we defined our end goal, we defined what compounding works, how compounding works. Now let's define our objective. So in terms of getting there, what do we really need to do? We need to invest in an asset that is high growth, which is tied better to the market volatility, which is truly diversified, it minimizes our tax liability and it provides us a truly passive income so we can enjoy the time that we have been dreaming for. Real estate investments do provide those kind of opportunities to us. And we have all seen this. We have all been motivated by different real estate opportunities, investments people have been doing over the period of years. One thing to keep it in mind that the mega rich of America, the top 1%, their portfolio is heavily, heavily invested in real estate. So when you decide that, okay, I want to reinvest in real estate, right? What are the next steps? Let's decide that we want to invest in real estate. What are the different investment options that are available? There is a single family route that you can go or you can go to the commercial real estate route. There are various options in single Family again, there could be that fix and flip, foreclosure, tax lien, Airbnb in commercial, there could be apartments, self storage, mobile home parks, student housing, you know, retail offices, etc. The challenges in this kind of different opportunities is if you want to focus on real estate, there's just too many options. There's just too many options. Do you know that if you Google real estate investment and hit search, it will provide you around 2.1 billion options? I'm not kidding. I did my search and I do this several times and number kind of changes a little bit, but there's just too many options to choose from. That's the biggest problem. You don't know which asset class to put to focus on and how to focus on that. These opportunities are really high risk. They are, you know, associated. The high rewards are associated with it. We see people earning huge amount of money, but really high risk. There are hidden surprises. Suppose tomorrow you decide to take a, you know, a house and flip that fix and flip it. You don't know what's behind those walls. They're hidden surprises. They're heavily intensive in terms of money and effort, commitment. And these markets are already saturated. There's so many competition. People have been doing it professionals, they have great skills in this area. They have been doing it. So if you want to do it and you want to stand that competition, you have to really rapidly grow your education and be there, right? And that's when there is a lot of real estate guru bits that you can come across where they will offer you free education. And when you go to the free education, they will actually upsell you in the Same seminar within 10 minutes to purchase an educational package which is of worth thousands of dollars, 5,000, 10,000, even 30,000. I have seen this number grow really big, really huge. This is, this is the typical challenges that even I have faced. So these are the challenges that we are, we are trying to tackle. So really stepping back. There are three high level problems when you decide that you want to invest into real estate. There is, number one, finding that right asset class in the real estate. Number two, the right education, right? The right person to give you the education. You do not want to reinvent the will. Trust me, you do not want to reinvent the will. You do not want to start somewhere that, you know, everybody starts. You want to start learning from somebody who has been doing it. So that, right, education is the key. Without spending, you know, thousands of dollars making that affordable and also precise enough, right? You don't want to be an active investor. So your intention is to get that precise education which drives you to invest passively. You have that right amount of education to analyze that deal. That is the second problem. And the third problem is when you know that asset class, you have the right education, but still you do not have access to to those investments. You do not know who is doing those investments. Where I can go and find the syndicators, where I can invest passively with them. And that's again the challenges that even I face. These are the real challenges that I face. And that's where the Think Outside the Stocks was born. Because taking from my learning, I want to help you, the busy professionals, to overcome these problems and actually go into the intention of this thing outside the stock. Right? So we are providing that solution to your problem by number one, providing that data driven education so that you can confidently invest in your passive investment opportunities. Then we are also bringing high quality investment by strategic alliance with different syndicators. We are vetting the syndicators, we are vetting their deals and we are bringing these opportunities to you so you can use that education, apply it on your investments, see if these investments are worthy of your investment and proceed to that investment. And also not just we just don't stop there, but we also provide you that hand holding to creatively find the money, where to invest from. For example, a lot of people don't understand they can actually use their retirement accounts to invest from without taking a loan or applying penalty on it. So that's number one help. There are certain regulations SEC apply on this indication. So we kind of provide high level guidance on that. We are not SEC attorneys, but we do provide what applies to you and how you can participate in these investments. And we also provide you that one on one end to end assistance in terms of investing, just understanding this investment process. So that's the whole process. That's the whole thought behind Think outside the stocks. So now let's focus on this particular asset class. We have talked about why we need to focus outside the stocks. We talked about the intention behind Think outside the Stock and how we can help. And now let's focus on that. Right? Asset class. Right? So solving the number one problem, what asset class should we focus on? We are going to discuss today the multifamily. That's the apartment we all have stayed in, apartment complex. It's at some point or we have seen the apartment complexes in our cities. So that's the asset class that we are focusing on. And here are some numbers. Again, numbers provide a good Fact based system for us to rely on. This is almost like a fundamental for the multifamily assets. So 39.7 million apartment residents stay in apartments to 21.4 million apartment homes which contribute to 175 billion to local economy including the property taxes and the demand versus supply. It's very interesting. 328,000 units was demanded in last year and we provided under 300k. The occupancy rate has been highest since 2000. It's at 95.2% last year. And the rent growth in 2019 we have seen 3.2%. What the rent growth means is if suppose you were paying for every $100 that they were paying in the rent, there was $3.20 growth in the rent. So it's consistently we have been able to charge that 3% higher rents which impacts the net operating income in a very positive way. The number two reason for for investing in multifamily is America is actually changing. America is changing big time in terms of how they want to spend money. And they are becoming more and more renters nation. There was the American dream used to be owning a home. But the home ownership dream is changing to financial freedom dream. And in terms of the affordability and the economic uncertainty, more and more people are actually being pushed to rent more. So if you can see on the right hand side, there is an incline in renting from America and decline in owning the homes. The baby boomers are downsizing. They had to downsize mostly because of 2008 recession or they cannot afford or they cannot maintain it. The millennials actually they are trendsetters. They're trendsetters in terms of renting more. They want freedom. They want freedom in terms of changing their jobs. They don't want to be stuck to their jobs or their cities for more than two years. They also want to travel more. There's a trend called digital nomadic lifestyle which basically they want to be able to work work from anywhere across the globe. So that trend is also increasing. They don't want to own homes and they're likely the urban lifestyle. And where the urban lifestyle is the affordability issue. That's why they're renting more and more. Again, some more numbers why America is becoming the renters nation. We have seen 107, 57% increase in American household earning 150k plus. So even if you are a high earning individual, you're still tending to rent more. The age group of 60 plus, there's a 32% increase in that age group. To go and rent rather than stay in the homes. And again, we are not providing enough to supply. This is how much we have been adding to multifamily. According to Yardi metrics, which provides really great data in terms of multifamily, they have shown the strongest growth in commercial real estate. In terms of multifamily, we were able to absorb 3,200 thousand units last year, which is consistent. And also the vacancy in multifamily has been the lowest, right? So that's why it is an important aspect to look at in terms of commercial real estate. Now, what is a multifamily unit? Let's just quickly look at anything which has generally five plus units is called a multifamily. And true economy of scale starts at 100 plus units. So people ask me, so do I buy 150 units in a, in a group of six or seven people and start managing? Well, the answer to that question is multifamily syndication. Now, multifamily syndication could be a new term to you and we're just going to take a look at what syndication really means. A syndication spelled out in a very simplest term is where investors pool their financial resources and the intellectual resources together to invest in properties or projects which are much bigger that they could afford or manage on their own. So there are two teams that come in picture, right? There is a syndication team or what's called a sponsor team, which brings to the table their experience, their intellectual resources and the management. After the deal is closed, then there is a limited partner which is basically you, the passive investors. Together they come up with 25 to 30% of the cost of that particular deal. Take a bank loan, which is the leverage, and purchase that asset. And the syndication team manages that multifamily asset and provides the cash flow and the upside back to the limited partners. So that's really a simplest syndication definition, a simplest indication form. And here is an example of an investment opportunity, a typical investment opportunity. And just keep in mind that you know this is not just purchasing a single unit or 10 units, is purchasing the entire apartment complex. So 212 unit apartment complex price 20 million loan 4% for 10 years, 75% value which can provide annual cash flow of 8%. So if you are investing 100k, about 8,000 annualized cash flow is what you're going to receive. In this particular example, your total returns are going to be 80%, which includes your cash flow. And equity multiple is 1.8 times, which is a 16% annual rate of return. And the duration typically is three to five years and the exit criteria is sale or refinance. So in summary, if you invested 100k, your expected total return including the capital, annual cash flow and upside would be 180k in 3 to 5 years. Advantages of the Single family so we talked about what our objective was, right? So on the left hand side it provides you a true diversification. It's completely passive for you which are the LPs, the limited partners. Because you are basically providing the effort to analyze the deal. Once you invest into it, you're basically really done with it. The syndication team is going to take it from there, manage it for you, provide you the cash flow and provide you that upside on the return. It's providing you the risk adjusted returns and it also provides multiple tax benefits. We'll talk about it in a little bit. It's relatively recession resistant and backed by tangible asset. So the asset, the apartment complex is staying there. On the right hand side this is more benefits than we had thought of. It's economist to scale. It provides you forced appreciation which is the value of the apartment complex is driven by the net operating income. And we are going to have another session on the deep dive into multifamily. We will talk about all these terms so don't get scared about all these terms. We will have the education again, the series will continue and we'll have an education to understand the syndication terms and syndication process more better. They also provide non recourse loans. So there are many many advantages to multifamily syndication than what the five advantages that we wanted from our passive investments. The Tax benefits Just to give you an idea how the tax benefits are provided. Number one, it provides you the depreciation of the building. If they provide the cost segregation studies in the year it can provide up to 60 to 70% depreciation. That's passive losses to what you have invested and 100% bonus depreciation with the new tax cuts and jobs act actually provides you even more advantages. And in addition to all this, if you can actually add on a benefit if one spouse is not working and who is able to qualify as a real estate professional, this is nothing to do with the real estate license. You don't have to be realtor to be a real estate professional. You can talk to CPA about the requirements but if you can be that one spouse can be that, the active income of the other spouse can actually be written off against the losses in your real estate. So actually that's the really good advantage in terms of taxes. How does it pay to be a passive investor into multifamily syndication? Right. So what are the different ways that you actually get paid while being in a syndication? The number one is you receive the cash flow distribution from the rents and other incomes collected every month. And it could be typically quarterly or every six months. The rent that's paid by the tenant actually pays the portion of the mortgage. So that's actually building equity every month for you. You also have that tax benefit via passive losses. You can take that tax benefit and apply that compounding growth and gain more from that. A forced appreciation of that value is actually achieved by increasing the operating expenses, operating income and decreasing the expenses that increases the value. The valuation commercial works a little bit different than single family. By increasing your net operating income, you can actually directly impact the value of the of the property. And at the end of it, at the end of the deal, you receive the significant upside which is realized at the sale or the refinance. So that's different ways you can gain as a passive investor by being in the syndication. So what are the risks? Right. We are looking at what advantages it provides, but there are also some downsides to it. First of all, it's an absolute illiquid asset. Once you move into the, into the investment opportunity, if it is for three to five years, your money is pretty much locked in that asset. So if you want your liquidity to be accessible, this is not the right investment for you. But if you can separate out some money where you don't need access, especially in your retirement account or even outside, if you need that cash flow, you can invest into multifamily syndications. There is a volatility ahead. I mean, there is a lot going on with the stock market right now. Real estate typically has a delayed impact to it. So there is still volatility. There is risk in any type of investment. So does the real estate and syndication too. There is a lack of control because the syndication team is actually in control and they are the one who's taking the decisions maintaining and they are the one also have the experience. Right? So that's. If you're not a kind of a person who would like to give the control to somebody else completely, this is not the right investment for you on how to invest. You need to be either an accredited or sophisticated investors. These are SEC guidelines. Again, when we have the training about the multifamily syndication, we will talk about all these terminologies. We will explain it in a better way so you can understand it. But we Will provide you that guidance and on your your status. If you for certain investment, a previous relationship is required. So if you are investing into certain certain investments, you need to know the person that you're investing with. And that's why you need to have. If we don't know each other, you need to know me. You need to establish that connection. So schedule a call or you know, start having that discussions with me. Typically 50,000, like I said is the minimum and the three to five years is a lock in period. You can invest from cash or like retirement accounts is a very creative way to invest. You can invest without penalty, trust me, you can invest without penalty or loan. And we can connect you with people who can help setting it up for you. You can also invest from the equity from your home. So without selling the home. So there are many creative ways to start thinking differently on how to invest in this kind of investments. What's next for you is really education is the key. We are very proud to offer you upsell free education which is tackling different aspects of this investment opportunity. So while you are waiting for the stock market to stabilize, utilize this time to use the education and get to the level where you can analyze the deals. So we will have different live stream coming up. We will also look at the single family versus multifamily investment. We'll compare them head on. We will also do a deep dive in multifamily syndication. And soon we are starting a passive investment program. The passive investor program actually is a weekly livestream program for four to six weeks which will provide you data driven data analysis program deal analysis parameters. These are tangible parameters for you to go and analyze that deal so you can confidently invest in the opportunities. From time to time we will also have guest speakers. For example how to invest from retirement account, how to grow your savings 3 to 4% compounded annually. So we will have a lot of guest speakers coming up. So if you have not signed up already, please go ahead and sign up and attend this educational events. So I will advise for you just to plan out your goals. Just look back, take a look at what your retirement goal is. How much you want to invest from your net worth. Do you want to invest from the cash flow perspective or retirement perspective? So think about it after this and think about it. Create a goal for yourself. Wait for the stock market to stabilize so that you can start taking the money out. Create your own strategy for it when you want to take it out, right? And how much you want to allocate to the real estate bucket in Terms of how you can collaborate with us, we can, we are, you know, you can join our investor club. Again, you need to know us to find out about the investments that's coming to us. So, so join that investment club. It's just a simple clicks and simple information. Connect with us, watch our investment flow, analyze that investment, apply that educations that we have provided on the investment and execute if the criteria appeals to you, if the criteria is right for you, just execute that investment and then after that just receive your passive cash flow and upside on exit in three to five years. So that's basically what you can do. And just from here knowledge is safe, knowledge is safe to spread and best to go viral. So if you know somebody who can benefit from this knowledge, please pass on this information, share with your friends and family. These are the tough times and the information that they will gain during this time is going to be key for their success in upcoming times. So please pass on this information and register to join more livestream. So we are almost to the end of this presentation. I'm going to open this for questions. Kavita asked a question. How is tax benefit in multifamily is different than the stock market? The stock market does not provide any tax benefit. Any tax benefit. You have the capital gain that you, you know, you have brackets that you have to provide tax on. But in terms of multifamily, if you look at the the three ways that you can get the tax benefits, it actually provides you opportunity to write off your tax. So suppose if you are investing 100k into the multifamily and you receive 7% cash flow on it, that's $7,000 in that year. You can apply the depreciation, you can apply the cost segregation benefit that you have received, you can apply the bonus depreciation. So sometimes at 100k you end up getting almost 60, 70,000 losses in that year. So if you earn 7,000, everything gets written off. The remaining can be carried forward to the next year and the next year you can apply that that losses again. So the earnings from multifamily is not getting taxed for that year. And like I said, if you have that added advantage when one spouse could be a real estate professional, you can actually take that 60,000 losses, apply to the active income and take that losses against the active income. If both husband and wife are working, can you still get the tax benefits? If both husband and wife are working, this is a question for from Rekha. You can still have the tax benefits which is limited to depreciation. Cost segregation and 100% bonus depreciation. You may not be able to apply all the losses that you have that year, but you will get it carried forward to the next year and apply it to next year. Only if you are a real estate professional, then you can one of your real estate professional, then you can apply the tax benefit completely for that area that year. So only on the passive income that you are earning, you can apply the tax benefit only on the passive income that you are receiving. Are these built apartment or buildings? And my related question is if the project fails, do I get my 50,000 back? Now your first question is the others built apartment or buildings. In terms of multifamily, there are two types of investments. There is an existing buildings which are older buildings and depending on what the age of the building, the classes of the multifamily is defined. So there is a class A which are really better quality in your investments. There is class B and class C which is basically getting older and older. Where there is more rehab is required, more intensive work is required. And the second aspect of it is development. So there are certain syndicators who have development experience, they built from scratch. So those are the two types of investments. Your second question is what if the project fails? So the project has lots of checks and balances. First of all, when you buy a single family house, you put your own credit online. So you are on that loan. There's a recourse loan. But in multifamily this is a non recourse loan. So for providing a non recourse loan, the lender actually have a lot of checks and balances before they give this loan out to the syndication team. So they have thoroughly vetted that particular deal. They look at, they verify and they also, when this project starts failing, there is a lot of oversight that's provided by different teams that they need to come in and start looking at why the project is failing. So there is more checks and balance to it. But at the same time you have to understand that this is investment. And as every investment there is a risk to this investment. For example, in stock market right now we see a huge amount of loss in the stock market. The best thing in the real estate though, that the loss is not so sudden. You will see that it's coming, it's gradually getting lower the value of it. This is backed by the tangible asset itself. The apartment is not going anywhere. So the apartment is going to stay, stay there. And that provides that risk, you know, that provides that good factor to mitigate that risk. It seems to me that the risk are very high in type of investment does the investor make profit only when property depreciates. This is the question from Vrinda. So the different ways of making the money is actually five different ways. So the first way is they're gonna provide you a passive cash flow distribution every year. So let me just go back to the example. So in this particular example, when you entered with a hundred K, for example, and the preferred return is provided as an annual cash flow, 8%, that means that none of the profit is going to the sponsor team, the syndicator team, unless you get your 8%. So the first 8% comes to you. So if you're providing 100,000, your 8%, that's 8,000 annually, is provided to you. So if this real Investment lasted for five years, eight times five years, you know, the 40,000 is provided to you annually. The total returns are projected to the 80%. That means that on sale they're expecting a 40% return on it. And that's why they're providing you that 80% return. So if you invested 100K, it becomes 180,000, including your capital by the end of that three to five years. So you eventually, in this particular example, getting 16,000, 16% annually back. That's total of 80%. I'm just gonna, you know, skip couple of slides and actually go to an example which supports what we just talked about. And it talks about a forced appreciation and how it works in multifamily. Suppose you walk in in the multifamily with a 10 million cost. The equity is raised by 2 million for 2 million. And the bank loan was leveraged 8 million. The net operating income, income minus expenses in this case is 1 million without the debt services. Right. The cap rate is 10% on this. And the strategy to increase the income and decrease the expenses, if they are able to increase the income by 100k, decrease the expenses by 100k, the new net operating income becomes 1.2 million. And the value calculated, and this is how the forced appreciation works, is 12 million. So if they're going to sell this, it becomes 12 million from the 10 million. And this is how the value gets increased in multifamily. A point to note here is your investor equity was only 2 million in here. So your 2 million actually became 4 million, providing you two times, twice, that's 200% returns on this investments. This is a good example to look at the question. I have a question from Amil, from Kavita. How do I know what are different multifamily investment investment opportunities that I have. So the investment opportunities will come from again once you sign up in the investment community, you will get to know about the investment opportunities. These investment opportunities don't come frequently and giving how popular this investment opportunities becoming, they also get get filled up pretty quickly too. So we will announce that the investments are coming. They will conduct. There'll be a webinar from the sponsor team which will talk about details of the investment that's coming in. You will have an opportunity to soft commit on it at the end of the webinar and you will also have opportunity to do your due diligence to do your deal analysis based on the education that you have gained from us. And you can apply that and if it is the right investment from you for you, you can move into that investment by doing an hard commit. Okay, so answered Kavita's question. Rak has a question. Is there any historical data for real estate investment over last 20 years? The how real estate has performed over the period of years. Right. So first of all, in 2008 recession when single family mortgages were hit really bad, the multifamily delinquency rate. The delinquency rate is basically somebody who cannot perform and had to give up that multifamily completely and they have to come out of it. The delinquency rates have been really low. And Shash, this goes back to your question again that you know, what are the chances of failing? Right. So we can see that these rates of delinquency in mortgages of multifamily is under 1%. It is actually historically low and it's, you know, at 0.06% right now. Whereas when we saw single family, the 12% was the delinquency rate in terms of mortgages. And that's what that 2008 was hit really hard with, the mortgage crisis. The second aspect to look at is a chart here on how the real estate is performed over the period of years. Over the cycles, again stocked again stacked against the stock market. So the CAGR matrix that we looked at again the CAGR for since 97, the CAGR for stock market is 5.5% and CAGR for all of the real estate included, including the single family, not just multifamily, but all of the real estate included is 8.7%. So it has consistently performed better than the stock market. It has its dip, but it has picked up back again. And this dip is mostly because of the single family, the multifamily OCCUPANCY actually went high during this period because people who moved out of their single family, they needed a place to stay. So they always in a recession need a place to stay. And that's why single, multifamily are occupational occupied. The next aspect I want to focus on though we don't have a crystal ball. How will this impact in terms of real estate? How we are seeing the unprecedented times that we are seeing the fluctuation in stock market. So the short term impact Right now we are seeing the industries are being heavily hit. They are hospitality, the travel industry and airlines. So we will start trickling these job losses which basically people are staying in all this, you know, all these classes. So this they will have, there will be rent loss, there will be an increase in economic vacancy of this. You can't really evict people at this time because there is no replacement good quality tenant set available. So at this time really the syndication teams are at test their experience, their strategy, how they can react to it is going to be on test. There will be a lot of syndicators, good syndicators. They will hold off giving that distributions to the passive investors. So they will hold off three months, six months if needed, a little bit more than that so they can build their emergency reservoir and they can, you know, if they have, they have been projecting three to five years as a whole period, maybe they will need to add a year or so till this bounce back. But this is again this is going to be, you know, not an immediate impact but this we will start seeing in the short run. And also it depends on how government intervened, right. Today they announced that they're holding off the, you know, the foreclosures for single family houses. So if they come up with a plan that okay, let's hold off to at least couple of mortgage payments when the rents are not being received. These are non recourse loan. Again keep that in mind and have some unemployment programs in place so that people are able to pay their rents. So it all depends on that in the short run. In the long run, how it's going to impact is the net operating income is going to fall a little bit so that because the rents are not being collected right, the cap rate is going to increase a little bit. What it means is the prices will fall and that will create more opportunities in near future. So they're going to be experienced indicators who will go aggressive and start investing into these opportunities. And this is the good time for passive investors like us to move in, into the good opportunities and invest our money to that. So that's, that's just again, I don't have a crystal ball. This is just a speculation of how it will impact the multifamily syndication. So for the livestream attendance, what I'm offering right now is a bonus 30 minute consultation with me. We will look at your investment objectives. We will look at, you know, creative ways to invest for you and we'll also create a roadmap for your investment goals. You can go to the Calendly app and it will send the links. After the presentation you can schedule a time with me. The second bonus is we're gonna soon start the passive investor programs and you will have the priority registration to it and it's going to be free again for you. It will focus on step by step investment analysis. If you want to get in touch with us, the best way is to go to think www.think outside the stocks and subscribe. Join our community to invest. If you are interested in investing, just complete the investor application and schedule a call. We are also on Facebook Think Outside the Stock community where you can discuss and there's a business page. Please go and like us there or you can send me an email or call me. So thank you so much to everyone. Thank you so much for attending in this tough times. Hope you are all stacked up and hope you are spending time, good time with your family. I really appreciate you being here attending this in these times again. This is the time that we need to take a pause, take a breather and spend our time wisely to educate ourselves so that we can invest better when the time is right and we can take that amount outside of our stock investments. So I'm really hoping that this health care goes away pretty soon and we just back to resume our life as usual. And if you're not staying inside still just flatten the curve. I urge you to stay inside and flatten the curve. Avoid the social exposure. Again, thank you so much for joining. That will conclude our meeting today. Thank you.