Real estate syndications are group investment opportunities. As a limited partner/passive investor in a real estate syndication, your capital is invested alongside other investors in a single commercial asset (i.e. a 250 unit apartment complex in Allen, Texas).
The best part about passively investing is you don’t have any other responsibilities – you get to leave the hard work to us! REIDOC Capital, alongside other General Partners in the deal will actively manage the asset and execute the business plan.
These types of deals are unique and highly sought after. We spend a lot of time underwriting deals and submitting offers – but very few of them end up going to contract. We typically offer 1-3 investment opportunities per year to our investors.
Typically deals fill up in a couple of weeks.
Keep in mind these investment opportunities are being sent out to thousands of investors to evaluate, and there’s only space for 60-80 total investors on the average deal.
The quicker you can act in your evaluation and reach out to us with questions, the more likely you’ll be able to participate before it fills up.
As soon as we have a deal under contract, we’ll send you an email with high-level details of why we love the deal, business plan objectives, and the potential returns.
You’ll be invited to participate in an investor webinar that’s typically a couple of weeks after we initially notify you of the deal. So be sure to block off time on your calendar and attend this live to ask questions.
Once the webinar is completed, we’ll email out a recording with the slide deck that includes all the business plan details and a link to review the documents in the investor portal.
If you love the deal and want to invest, you’ll complete the documents in the investor portal and wire your funds with the instructions provided.
You can invest through cash (wired funds from your account), Self-Directed 401K or IRA, personally or through an entity like an LLC or Trust, and individual or joint-registration with your spouse.
Yes. As a multifamily investor, you can get the tax benefits of property ownership, including *accelerated depreciation through cost segregation, which can help lower the taxable passive income you receive.
*Cost segregation identifies costs that would typically be depreciated over 27.5 years and reclassifies them to permit a shorter, accelerated depreciation method. This segregation model leads to substantial tax savings for the investor versus the standard depreciation model.
Every year, you’ll receive a Schedule K-1 tax form for your tax filings. This form will report your income and losses for the investment.
There is an opportunity to apply the losses against your ordinary income if you are a real estate professional.
While not all deals will have all of these fees and some deals may have other fees, the typical deals that we sponsor have the following fees:
In addition, there can be other costs in the deal including broker fees, lender fees, and other closing costs. It should be noted that the pro forma returns communicated to investors are all net of these fees.
The preferred return is the threshold return that must be paid to the Limited Partner (LP) or passive investor before the General Partners (GP)are compensated. For example, if the preferred return is 8%, the total equity in the deal is $1mm, and the available cash for distribution in a given year is $120,000, $80,000 is paid to the LPs and remaining $40,000 is distributed to LPs and GPs according to the specifics of the deal (see the FAQ on split).
Preferred returns are typically carried over to the following year if not met in a given year. For example, in the example above, if there was only $70,000 available for distribution in that year, all $70,000 is paid to the LPs and the remaining $10,000 is rolled over to the following year when the LPs are owed $90,000 before the GPs receive any compensation.
After the preferred return is paid to the LPs, the remaining cash is distributed amongst the LPs and GPs according to the split documented in the PPM. If the split is 70% to LPs and 30% to GPs, then the remaining cash is distributed accordingly: 70% of the cash in excess of the preferred return is paid to the LPs and the remaining 30% is paid to the GPs
The typical minimum is $50K although certain deals have a $75K or even $100K minimums
Distributions are typically made quarterly and usually start after 6 to 9 months after acquisition. Any return of capital and any gains from sale are typically made within 30 days after sale. Similarly, any return of capital on refinancing events are also made within 30 days of the refinancing event.
The asset management fee is an annual fee paid to the general partner for overseeing the property. Typically, the fee is 2% of the collected income or $250 per unit per year.
Capitalization rate, typically referred to as cap rate, is the rate of return based on the net operating income that the property is expected to generate. The cap rate is calculated by dividing the property’s net operating income (NOI) by the current market value or acquisition cost of a property (cap rate = NOI / Current market value)
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