With syndications... "Investors can invest in real estate without the hassles of managing tenants or toilets.” - Forbes

Introduction:

Real Estate Investing is the single most stable & predictable wealth-building tool in our tool belt. It's the biggest tool I've used in the past 15 years. What I didn't realize until just a couple years ago, though, is that being an "ACTIVE" investor MAY not actually net you MORE in your investment accounts than being a "PASSIVE investor".

I coach real estate investors individually and through masterminds. If you started (or have thought about starting) real estate investing like we did, you probably bought a single family home.

If you paid 25% down to the bank, purchased the home for the average sales price in the US a couple years ago, rented it out for three years, got a moderate increase in rents and about a 5% increase in home value over those three years, and then sold it.... you'd see about a 7.5% average return on your cash for that time period. Not bad. It's certainly better than the bank!

But here's the thing I've learned. That 7.5% didn't account for all the hours you spent finding the deal, analyzing it, buying and managing it. If you would have invested that same amount of money into the type of Syndications we find, you would have had around 15% average return AND you could have spent that time doing other income producing activities that you are really good at and you feel God has called you to, such as working a few more hours as a physician, teaching another class at the community college, marketing a little more in your business, or talking to a few more potential clients in your sales job. So by the end of those three years, you'd have. a higher return and you'd have made even more money that you could put back into your next investments!

There are three domains that all real estate investing requires. Your job is to realistically evaluate which of these you have more of.... because that will help you decide if Syndications are right for you.

1. TIME

Real Estate Investing takes time. It takes time to learn, to find deals, to vet deals, to close on them, to manage them once purchased or to resell if that's the strategy. In almost every step, time is involved. Sometimes the time can also refer to the holding time of the asset. The challenge is how do busy professionals invest when they have little or no extra time to spend on investing?

Just like entrepreneurs do when they are scaling their business, Investors must leverage other people's time. In some contexts we call it "delegation". We also call it increasing our ROI on our time. Face it, we all know that time is the ONLY non-renewable resource in our life. We can't make more of it and we can't earn it back.

Therefore, harnessing other people's time is the simple key to unlocking real estate investing when you don't have or don't want to input your time. Dr. Peter Kim of Passive Income MD referrings to this as the 80-1 rule (borrowing the concept of the 80/20 principle, also called the Pareto Principle). Dr Kim astutely points out that "passive real estate investing offers 80% of the benefits of direct ownership with just 1% of my time and effort." Now that is some increased return on time!!

2. MONEY

Real Estate Investing takes money. The beauty is that it doesn't have to only take YOUR money. And when you have more money than time, which most busy professionals and entrepreneurs find for themselves, money can become the primary way to gain an ROI for your future!

If you've considered or actually been an active real estate investor, you'll probably recognize the brutal reality that I came to recognize after 10 years of investing. At a certain point in the journey, your money with make more money than your time. For example, at the beginning of many investing journey's, we buy a single family home and rent it out. We make about $150/month profit on the rental. We hold it for 3 years and then go to sell it and move our equity into a larger property. Assuming a modest rental increase and a 5% increase in property value each year, you may only end up with a 7.5% average return on your cash invested. But that doesn't take into account ANY of your time investing into the deal... to find it, buy it, manage it, sell it, etc.

By contrast, what if you let your money do all the work, not you? The syndications that we look to invest in have a minimum of a 15% average return over the life of the investment. AND you have very little time commitment involved. Just your due diligence on the front end and touching base on the investor updates we provide quarterly.

3. RESOURCES

Real Estate Investing takes resources. By resources, we mostly mean relationships, such as having trusted property managers, agents or brokers that can help you find deals, lenders who will work with you to securing financing, contractors to work on the property once purchased to help fix things or rehab units to maximize income, inspectors to ensure you know what you're getting into upon purchase, other investors to run ideas and plans by to get a second or third opinion on, and the list continues.

Active real estate investors must create their list of trusted resources so they can maximize their returns on properties.

The value of Passive Investing is that the syndication team has already curated these identified these resources. So as we talked about increasing our ROI on time, we can continue to increase our ROI on time by delegating this critical aspect of real estate investing to someone else!

WHAT MEETS YOUR NEEDS?

Here's the chart I use when I help Investors determine their best strategy. I can help you think through your plans and how they fit into ultimate goals!

Questions about Syndications or if passive investing is a good fit for you? Set up a free consultation call with me!

https://www.titancapitalcollective.com/schedule

Have a Blessed Day!!