Many people have an interest in investing in real estate but lack any desire to be a landlord. (Can I get a yes!) This might make people who would otherwise be great in real estate investing take their talent and knowledge elsewhere. However, there are ways to invest in real estate without being a landlord. Many can be just as lucrative as more traditional real estate investing.
Investing in real estate through commercial apartments is a tried and true method to create cash flow and wealth without having to be a landlord. However, that doesn’t mean it’s the only method to enjoy the benefits of investing in real estate, but it is the one that I choose and highly suggest if you are a busy business owner or high demand postion. If being a landlord sounds like a time drain to you, there are other methods of real estate investing I will share with you.
“Now, one thing I tell everyone is learn about real estate. Repeat after me: real estate provides the highest returns, the greatest values and the least risk.” - Armstrong Williams, entrepreneur
Reasons to Invest in Real Estate
Investing in real estate is one of the most stable and consistent ways to grow wealth, increase your profits and protect yourself against inflation, recessions and other ups and downs that can happen. It tends to stay the most stable when the economy hits a bump as rental housing will always be in demand. While there is risk to making any type of investment, real estate is an excellent method of diversifying your risks to avoid any kind of serious loss.
Real estate also allows for cash flow during the life of your investment. This is a unique aspect of real estate that few other investment types provide. And generally as a passive investor, you see your returns before the operations team.
Real estate (specifically apartment or multifamily) has the ability to increase in value in a relatively short amount of time by buying at the right price, renovating and improving the units/property and then increasing the rents to the new value. This is referred to as "forced appreciation". Being able to have a direct impact on an investment is one of my absolute favorite parts of this type of investing.
There are many other benefits that are covered in other articles, but don't forget about tax benefits and how hands-off this type of investing is for passive investors.
Why Choose Apartment Syndication or Group Investing
If being a landlord isn’t something you’re interested in, apartment syndication could be a great choice for you. The basic idea behind syndication is that several companies or people combine resources (such as money, time, or knowledge) to accomplish something that would be challenging or impossible to do on their own.
There are tons of people that would see a benefit from owning an asset that appreciates, such as an apartment building. It offers cash flow and even tax incentives that cut the amount you pay every year. However, many people don’t have the time, money, or knowledge to buy a big building full of apartments on their own. That is where my Whole Wealth Investing Group comes in.
A real estate syndication is a transaction that has an operations team (also referred to as GP - general partners) and several passive investors (also called LP's - limited partners). The operations team are the people who operates and manages the deal (that would be me and my team). They’re out in the trenches finding properties and raising funds to buy them. The operations team is who acts as the landlord by managing the property on a daily basis.
On the other hand, the passive investors will invest the funds for the downpayment and renovation costs.
Rental income and property appreciation are the two primary methods the operations team and partners make money through apartment syndication. The operations team handles the building needs and then sends money to the investors on a monthly or quarterly basis. That means you invest but never have to take on the role of landlord. You get the benefits without the work.
Real Estate Investing Is Worth It
There’s more to real estate investing than buying a property and then selling it to someone else. It’s a huge industry and there are many ways to get involved. There’s no need to deal with the day-to-day work of managing an apartment building if that isn’t exciting to you. A real estate syndication offers you the best of both worlds and could be your chance to diversify your investment portfolio.
Next Steps
If you are ready to start passively investing in real estate, watch our Master Class 'Profits To Wealth' and join our Whole Wealth Investing Group so we can help you determine what your investment goals are and how we might help you.
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