Why I Absolutely Love Investing Passively In Real Estate Syndications

2March, 2020

Why I Absolutely Love Investing Passively In Real Estate Syndications

By Shirley Xu

One day, I got a call from my tenant, he said his power went out in the kitchen, I called the electrician. Electrician calls me said nothing wrong with electrical, but he saw some water stain on kitchen ceiling at corner, maybe roof leaking? I then called the roofer, roofer reported roof not leaking but he said you might need a plumber. I then called the plumber, what a day! The plumber went, he confirmed the stain at corner is from the sewer line inside the wall, the sewer line had few inch crack. He quoted $3000. I don’t have choice since it is sewer line, and you can’t leave it open to get quotes. (my whole year cash flow is down the drain, I said to myself silently) When the work is completed, I was happy.

I have been buying and renting houses for years by then and think myself is a good and responsible landlord. A month later, I got a letter from an attorney that my tenant is suing me claiming he got E. coli (a disease from bacteria) from sewer line leaking and asked for $50000 for damage and suffering. “ it’s nonsense ! he will have to lick the liquid to get e.coli.” My doctor friend told me. It took a year and countless hours to prepare doc and go to court … fortunately I kept a very tight ship. I had all the rental licenses ( I urge you to get one if you don’t have yet to protect yourself) and I kept all records of inspections and repairs. I won at the end. My attorney congratulated me at the hearing but I was exhausted and felt betrayed by the tenant. It costed insurance company $20,000 to defend me. ( I urge you to get rental insurance if you don’t have yet to protect yourself)

I have been land-lording for 15 years. Real estate investing works, it creates cash flow to support my family and it creates equity overtimes. When I first started my real estate investing, I wanted to buy 200 houses, Later I realized that I am not just buying houses, I am buying houses with people in it. Real estate is a person business, the more tenants you have, the more headache you have. Tenant evictions, mold, flood, damages, leaky toilets… you name it. The list goes on. I can tell you stories after stories … I thought that’s part of the deal, it is the only way to invest till I found out the passive real estate syndication. I wish I knew this 10 years ago. Nowadays, I moved my focus from world of active investing to passive investing – investing in real estate syndication

What is a real estate syndication?

In the simplest sense, a syndication is a group investment. A group of investors pools their money to invest in something together. In the case of a real estate syndication, investors come together to invest in commercial real estate assets, like apartment complexes, self-storage buildings, and mobile home parks.

The beauty of a real estate syndication is that you can leverage other people’s time, energy, and expertise.

In a syndication, the sponsors are the active investors, the ones who know the ins and outs of that particular market, who spend time getting to know the real estate brokers, who visit the properties and walk the units, who pore over the due diligence documents, who work with the property managers day-to-day.

As a passive investor in a real estate syndication, I get to partner with a stellar team with a strong track record, invest my money in a great piece of real estate, and get great returns, all while doing next to no work.

Let me say that again, because I think it bears repeating. I get to invest in real estate without having to do any work.

Renovations running behind schedule? Not my problem.

Noise complaints from the tenants in apartment 2B? Not my problem.

Tenant stopped up the sinks and flooded two units? Not my problem.

The sponsor takes care of all of that, and I get a neat little monthly report on the progress and updates.

As a passive investor, I can spend more time with my family and less time dealing with the headaches of being a landlord. #winwin

What sponsors get?

For their work, the sponsors get a cut of the deal, just as a pilot gets paid for their work in flying the plane. The lion’s share of the returns, go to investors, most likely 70% goes to investor

What do returns look like?

Just like when you invest in a rental home, the returns in a real estate syndication can vary, based on the asset, market, and business plan.

What I can tell you though, is that, on average, the deals that I invest in (which are the same deals that we offer to our investors) have a cash-on-cash return of 8 to 10 percent per year and are held for a projected 5 years.

When factoring in the profits from the sale of the asset at the end of the 5 years, the average returns are around 20 percent per year. Not bad, right?

In other words, if you were to invest $100,000 in one of these real estate syndications with us, you could expect around $8,000 per year in cashflow distributions. On top of that, when the asset is sold in year 5, you could expect another, say, $60,000.

In 5 years, you would likely turn your initial $100,000 investment into $200,000. All without lifting a finger or dealing with a single broken toilet.

How to Invest in a Real Estate Syndication

The process to invest in a real estate syndication is a bit different than buying a rental property. For one, you can’t just go up to a broker and ask about a syndication. It doesn’t quite work that way.

Rather, to find real estate syndication opportunities, you need to find sponsors who have deals currently under contract. Often, because of SEC regulations, sponsors cannot publicly advertise their deals, so they can be hard to find unless you know someone who knows someone.

Luckily, now you know someone who knows someone. (Hint: It’s me.)

At Golden Bridge Investments, we specialize in connecting passive investors to experienced sponsors in growing markets. We do the heavy lifting of finding and vetting sponsors and deals. We cherry-pick the best deals in the best markets, and we make them available to our investors.

We’re investors first and foremost. So we’re always looking for deals that we want to invest in ourselves. When a deal meets our strict criteria, we invest our own money into the deal, and we open up the investment opportunity to our investors as well.

What does Golden Bridge Investments get out of it?

We’re in the business of helping people. We’ve seen firsthand the difference that great sponsors and syndications can make to a community. We’ve had tenants thank us profusely for the work we’re doing in turning their communities around.

We’ve also been thanked by investors whom we’re helping to build passive income streams, so they can stop worrying about money and start living the lives they’ve always wanted.

We work hard to find great sponsors and great deals. When we find them, we partner up with the sponsors and join the general partnership.

As such, we get a cut of the sponsors’ fees and equity in the deal. That means that, as an investor, you invest your money directly into the deal; you don’t pay us any extra fees.

Ready to learn more?

The best way for you to learn more about real estate syndications, as well as our current, previous, and upcoming deals, is to join the Golden Bridge Investor Club.

Through the Golden Bridge Investor Club, you’ll get first looks at all the deals we offer. We’ll work with you to figure out your investing goals and to help you find the best deals to meet those goals. We’ll then walk with you every step of the way as you invest in those deals.

So if you’re ready to be done with the headaches of being a landlord, sign up for the Golden Bridge Investor Club now, and get started on your path toward becoming a passive real estate investor.