All Forum Posts by: Andrew Hogan

Either that, or get with someone who has read several PPMs and operating agreements before to help explain the points you don't. As you read more, you'll start to see similarities and notice differences.

@Tauseef Ur Rehman, great question. Typically being an LP in a multifamily syndicated deal will yield you a consistent cash flow depending on the sponsor. The more capital you can allocate to the passive real estate bucket, the faster you can increase returns and the better the monthly cash flow gets. 

 Very well put @Jay Hinrichs! Becoming an active investor may yield higher returns IF you know what you're doing. But will it will also add a second job on the plate... investing in "warzones" may add a third or fourth job on the plate! lol Plus it's extremely hard to scale.

Especially at this point in the economic cycle, you don't want to play with investing in "opportunistic deals" that you haven't invested 10k+ hours in!

Here's the same question with more great responses a few months ago: 

https://www.biggerpockets.com/forums/432/topics/705911-how-do-syndicated-apartment-holds-fail

Hey @John Allen, great question! 

I think that if you want to take advantage of the economies of scale in the larger MF deals like you mentioned, the best thing to do is maintain your current income. There's nothing wrong with investing passively to gain a solid understanding. Then, if you decide being active is what you truly want, you can make the switch with the confidence that comes from knowledge AND experience. 

Or you can cut off your main stream of income and not take advantage of learning from others' mistakes. 

Up to you :)

@Ryan H. Sounds like you don't want to be very actively involved in the day to day operations while living abroad. Like others have said, Turnkey can be passive, but the turnovers can kill your returns. There are several different passive vehicles though.

To answer your question: 

What is a conservative plan with low maintenance rental properties each year? 

Multifamily syndication will require a good amount of initial due diligence on the sponsor, but very minimal time/effort once you've made your decision.

50k / year will require 5 Million in equity earning 10% (if we're being ultra-conservative here). I think the first step would be to educate yourself on different vehicles that will allow you to invest from afar and then find the expert sponsors in each of those to help you allocate your capital and achieve your goals.

@Tyler Hampton Just depends on the sponsor and how they filed with the SEC. There are plenty on both sides of the coin. If the syndication is for non-accredited investors, it limits the sponsor to how much information they can give and it can only be to formerly established relationships. Once a sponsor has a proven track record, they will typically only partner with accredited investors.

Like Michael said, syndication is great for those who don't want second and third jobs. If you've got the time AND experience, being an active real estate investor can yield greater short-term returns. Whereas syndications can spread your investment across hundreds to thousands of doors and give you that true passive income.

@David Ripplinger Question: what sort of investments are you looking for? Single Family? 2-4 units? More? Do you want to be 100% hands-off?

I've noticed that business strategies change for different areas of focus.

This question comes up all the time. I'm not a CPA by any means, and you should hire a firm that specializes in real estate.

But I do know that under the new tax regime, our investors that redeploy capital within a calendar year into our subsequent large deals pay little to no capital gains/tax. This is due to the cost segregation, bonus depreciation, and accelerated depreciation that is now allowed to be written off in year one. I'm happy to elaborate via a PM if anyone needs clarification.