Our Strategy
Our Target Market
As a nationwide firm, we target primary, secondary and tertiary markets with developed real estate demand, strong apartment fundamentals and moderate cap rates.
Cities with favorable year over year employment drivers (low unemployment rates, increasing job numbers, job diversity, new businesses) come with stable rental income and high rental occupancy rates.
Additionally, submarkets with high barriers to entry are a must as well as the current and forecasted population growth must be sufficient so that demand remains high while at the same time absorbing and outpacing future supply.
Last but not least, growing rents and favorable cap and occupancy trends are also a must. All are important indicators of a healthy economy and a lower associated risk of investment.
How We Source Our Deals
Our firm operates under a Value-Add investment criteria. We identify, qualify and purchase underperforming properties that have value add potential. These are day-one-cash-flowing stabilized assets (85% or higher economic occupancy) Class A, B or C apartment communities, built 0 – 20 years ago and have 100 units or more.
To increase the property’s value, we improve it through (i) exterior and interior renovations in order to increase rents and/or (ii) improving the asset performance and efficiency by decreasing operating expenses.
Since we only purchase stabilized properties the established paying renters ensures day-one cashflow and the added improvements force appreciation resulting in a higher property valuation and large return at sale.
Deal flow arrives two ways; On-Market & Off Market:
- On-market: We work with the top commercial brokers and firms throughout the country in order to qualify and secure those opportunities that only match our investment criteria.
- Off-Market: Due to our network and leadership within our real estate niche we often deal directly with private owners, developers and corporate owners as well as receive unpublicized opportunities from brokers. These deals come as a direct result of our professional reputation as a firm with high integrity, stewardship and trust.
Our 100:30:10:1 Process rounds out our sourcing efforts. It is as follows:
- 100+ Deals: A continuous flow of opportunities with a brief yet high level review of each as a first step qualifier.
- 30+ Deals: These deals pass the initial first step and adhere to our investment criteria. We then perform a more in-depth underwriting analysis of each.
- 10+ Deals: Offers are placed on the deals that pass our underwriting process and meet our business plan.
- 1 Deal: Acquisition and closure on an asset that meets all requirements. Out of 10 offers submitted, 1 deal passes final round intensive analysis and is closed on.
Investor Testimonials
Thank you, Nate and Syndication Capital, staff for all your patience and understanding in helping me grow my nest egg.
Thank you for all the hard work. To our continued success!
I highly recommend investing with Syndication Capital. We couldn’t be happier with our results. We will continue to partner with them on many more deals. The team is very professional, always accessible and does what they say they’ll do. I look forward to partnering more in the future. God Bless.
How We Analyze Our Deals
We analyze deals through our rigorous 100-point pre-purchase/post purchase process.
- Conservative underwriting and overall financial analysis.
- Location and area study.
- Detailed property history report.
- Thorough property inspection report.
- Property condition reports. (exterior and interior)
- Competitive rental comparisons and sales comparisons.
- Cost assessment & analysis.
- Risk assessment & analysis.
- Tenant profile and demographics report.
- Brand repositioning report.
- Dispositioning analysis.
We utilize a systematic and powerful full cycle acquisition to disposition business plan to create the best ROI for our investor partners.
How We Structure Our Deals
Based on our investment criteria, our deal structure is laser focused and specific.
- 85%> pre-purchase occupancy (walk-in cashflow)
- 100 units or more
- Minimum Metro Population of 250,000
- Our purchases are done using long-term debt in a range of 60% – 75% LTV (Loan-To-Value).
- Debt investor interest payment return target of 10% or greater depending on investment amount and term.
- Equity investor cash-on-cash return target average of 6% or greater over the life of the business plan.
- LP/GP profit splits range *50/50 – 80/20 depending on business plan. *Hurdles included.
- Investment hold periods range 5-10 years depending on the business plan, with a 5-year IRR target of 14% or greater.
Are you an accredited investor looking for turnkey cash flow and profits from passively investing in an apartment community?
How do I make money?
With Syndication Capital, investors can make money in two roles: Debt Investors and Equity Investors.
As a debt investor you’ll recieve a fixed interest rate payment on the money you loan out on the deal. This interest payment is paid to you until 100% of your investment capital is paid back.
As an equity investor you’ll recieve a recurring cash return, profit split proceeds at sale and returned investment capital.
How often will I be paid?
All our distributions are made on the monthly basis.
Do you invest in your own deals?
Yes, we invest passively in our own deals. Doing so adds an extra level of alignment of interest with our investors.
How many investors do you have in a typical deal?
It depends on the deal and/or the size of the equity raise, each deal is different. However, there are investment minimums and maximums on every deal we do.
Why should I invest with Syndication Capital?
Our company story and business strategy are the same. We specialize in multifamily apartment investing. We only invest in what we consider to be stable, steady markets with strong and profitable apartment fundamentals. We do not deviate from our investment strategy and criteria which is conservative by design and proven. Our overall chief objectives for our investor partners are capital preservation, wealth building and financial freedom. We differentiate ourselves from other firms through alignment of interest, full transparency, integrity and trust. Additionally, we give back in the form of charitable contributions, create caring communities and provide real improvement in the quality of life of our customers by turning units into homes.
Is the investment in a fund?
All investments made with us are in individual stand-alone multifamily apartment assets. We do not offer a fund structured investment.
How do taxes work with this investment?
We recommend consulting with a tax professional for all tax benefit related questions. With that being said, we provide investors with a Schedule K-1 tax form at the beginning of the year and provide access to multiple tax advantages.
For example, generally investors enjoy the depreciation benefit of real estate. Furthermore, the depreciation will be greater than the distributions paid out that year. In such cases, investors pay taxes only on sale proceeds, which also can be deferred.
Are you prepared for the market correction that coming?
In preparation and anticipation of any market correction we only acquire assets that match our investment criteria.
Additionally, we follow proven best practices of day-one cashflow, long term debt and adequate cash reserves as part of our recipe for success.
Can I invest with an LLC?
Yes, however, we do not offer advice on how investors should invest. We recommend consulting with a professional CPA on how to properly invest with an LLC.
What happens if I want to pull out of the deal?
It is possible for investors to pull out of our deals. The process for how/whether is outlined in the PPM (Private Placement Memorandum).
Generally, with written consent of the general partners an investor can sell their shares. First right of refusal goes to general partner(s), then limited partners, then any qualified buyer approved by the general partner(s).
What kind of financing are placed on these deals?
As a risk mitigator, we look to secure long term debt on all our deals. Since every deal is different the actual financing is determined on a case-by-case basis. Overall, the type of financing secured, in all its facets, will be that which maximizes investors returns while minimizing risks.
Can you walk me through a typical investment process?
Get our free E-book, “How To Passively Invest In Multifamily Apartment Syndications,” for more details. As well as see the Our Process page for a quick illustrated overview.
Why did you pursue this type of business model?
Generally, there are 3 business models within multifamily apartments; turn-key, value-add and distressed. We are value-add investors.
Turn-key has lower risk with lower upside potential. Distress has higher risk with a higher potential upside. Value-Add offers the best of both with lower risk and high upside potential.
What are the major risk factors of investing in multifamily apartments
Overall, the 3 major risk factors are the team, the market and the deal itself. We address these factors through our conservative underwriting and due diligence processes, proper market evaluations and by having qualified, experienced team members. Furthermore, we believe in and employ best practices of securing long term debt, buying for cashflow not natural appreciation and having adequate cash reserves lessens investment risk.
What is a worst case scenario of an investment I'm in?
The worst case would be we lose your money. You invest more money and we lose that as well. While this is unlikely this is an investment and like all investments there are risks.
However, we work diligently to make sure we address potential risks proactively through conservative underwriting and due diligence, qualifying the market, and partnering with knowledgeable, experienced team members.
How long do I have to keep my money in a deal?
That depends on the business plan. However, our deals typically go for 5-7 years.
How does the process work after you find an investment?
Investors will be notified about the new investment opportunity and given a date and time to join a new offering conference call.
During the conference call, investors learn about the property, the business plan and more specifics of the deal.
After the conference call has concluded, interested investors can officially commit to invest by receiving, signing and returning the required documents.
Are there any other asset classes that you focus on?
No, our firm only focuses on multifamily apartments.
How am I notified about new opportunities?
We notify our current investors first about new opportunities. Shortly thereafter, we present the opportunity to new potential investors, of which participation is on the first-come-first-serve basis.
Who will be my main point of contact?
Upon investing, investors are assigned an investor relations manager. This professional is available for investment questions and concerns. As well as a provider of ongoing communications regarding company and business updates and correspondence.
Is this the same as a REIT?
No. A REIT (Real Estate Investment Trust) is basically real estate flavored stock and is highly correlated to the performance of the stock market. As direct fractional investors, our investor partners are protected from that volatility.
Additionally, our investor partners have access to all of the tax advantages that are unavailable to REIT Investors.
Lastly, our investor partners have the ability to choose which projects they invest in. REIT investors rarely have this option.
Do I have to submit my personal financials to anyone?
No. Currently, we operate under SEC 506b regulation which does not require the submission of financials.
Who owns the property?
The property is owned by a LLC, setup by the general partner(s). Investors in turn buy ownership through the purchase of shares of the LLC.
Who will manage the property?
The asset will be managed by a professional third party property management company with a proven track record of success.
What happens if the investment fails?
While we never expect a project to fail, as with any investment there is risk in real estate investing.
We provide investors full transparency of all known and unknown associated risk prior to committing any capital to a deal.
We work diligently to make sure we address potential risks proactively through conservative underwriting and due diligence, qualifying the market, and partnering with knowledgeable, experienced team members.
What type of reserves are typically established with each project?
In our underwriting process we include an operating budget to cover unexpected occupancy dips, renovation and operating expense over runs and lower that projected rent premiums.
Do you guarantee a return?
No, we do not guarantee a return. As with any investment there are known, unknown and unknown unknown risks. We strongly recommend caution against investing in “guaranteed returns”.
What happens if you can’t make the projected cashflow?
If for some unforeseen reason we are unable to distribute returns in a timely manner, distributions accrue until paid out with the latest being upon sale of the asset. However, if the project loses money, a pay out of cash flow may not be possible.
What does my investment go towards?
Funding distribution is spelled out in the “Sources and Use” section of the PPM.
Categories include but not limited to; closing costs, renovation costs, operating account funding, debt origination fee, general partner fees, and the loan down payment.
What is the minimum investment?
$50,000-First time minimum
$25,000-Returning investor minimum
What type of investor reporting will I receive?
Investors receive recap emails that includes but not limited to; asset occupancy rates, unit renovation updates, rental premium details, capital improvement projects, market updates, resident events.
Recap emails are sent each month and financials on a quarterly basis.
Can I speak with other investors/references?
Yes, and are available upon request.
What tips do you have for first-time investors?
Look for opportunities that mitigate risk and are conservative. Buying for cashflow, having adequate cash reserves and securing long term debt are all best practices we highly recommend.
What are my next steps if I want to invest?
Click here to Join Us. After filling out the provided investor form you’ll be added to our private passive investors club and contacted. We look forward to hearing from you.
