A syndication is simply a pooling of resources, whether time, money or otherwise.

Think of a syndication as a plane ride. The deal sponsors are the pilots. They’re the ones dealing with the day-to-day operations of the property.

Legacy is the travel agent, helping people find the right flights and determine their destinations.

You are the passenger. You choose a flight, buy the ticket, and enjoy the ride.

As a passive investor, you just invest your money, then sit back and start receiving returns. We take care of the investments and provide you regular updates.

An accredited investor is someone who meets certain requirements regarding income and net worth, based on Securities and Exchange Commission (SEC) regulations. This is so that the SEC can ensure proper protection for all investors.

To be an accredited investor, you must satisfy at least one of the following:

1.  Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
2. Have a net worth exceeding $1 million, not counting your primary home
   While most of our investments are available to accredited investors only, we do offer a few investments for non-accredited/sophisticated investors.

Typically the minimum investment is $50,000.

Commercial real estate assets like apartment buildings and self storage operate independently of the stock market. In fact, they tend to fare better in recessions, because more people tend to downsize. They also tend to be safer investments than single family homes because if one tenant moves out, you still have income from other tenants to continue to pay down the mortgage.

The professionally managed community of build to rent consists of a series of phases for this multifamily development. The general concept is to pinpoint the land, have a vision, blueprint the zoning, get permitted and complete construction. The major concept of BTR consists of acquiring land to build a horizontal-multifamily complex of single-family homes and put them on the market for rent. Unlike traditional multifamily assets, build to rent developments consist of the neighborhood being gated in with amenities that only the tenants have access to. The advantages of no HOA costs or servicing mortgage debt and accessible community pools, tennis courts, dog parks; brings attention and increases possibility of the BTR multifamily development to succeed.

BTR is a popular multifamily development because it gravitates towards a wide audience of consumers. BTR projects have been successfully operated for several years and many well-known lenders have underwritten and approved loans. Therefore, the investors in BTR projects can expect more consistency on debt terms and be assured of long-term hold periods. Unlike investing in the stock market, BTR projects provide a consistent flow of monthly revenue. Because BTR is a business, the investors can take advantage of the tax deductions through depreciation and interest expenses. As an asset, BTR has a history of exit cap rates that are similar to traditional multifamily assets, with the cap rates ranging from 4.75% to 5.5%.

As development departments continue to design the sprawl of cities, they have recently taken great favor towards BTR communities for numerous reasons.  BTR provides a dense utilization of land area and affordable living options that cities are seeking to maximize.  Apartments can be seen as less attractive in new developments due to the boxy and large commercial feel they present.  The BTR developments are sought after by cities for the reason that they accomplish high density dwelling but with a greater community vibe and more aesthetic appeal.  The benefits of single-family combined with the convenience and cost effective nature of multi-family is a desirable hybrid. Furthermore, with the massive retirement wave going on with boomers, there is a significant exiting of single-family assets into rentals.  Boomers are seeking to liquidate equity and down-size for retirement, transitioning them from owners to renters. Millennials also gravitate towards the BTR communities because they are affordable and convenient. Most millennials would be more likely to rent rather than own a home due to being tied up with student loans, credit card debt or a lack of substantial savings; making it nearly fiscally impossible to stabilize homeownership.

BTR offers investors a relatively new and exciting asset class that incorporates medium to high economies of scale, affordability, and quality of living for tenants of various demographics and age brackets, as well as lucrative exit strategies. When the cost of living goes up, rents usually follow suit and those who are investing in the BTR properties can see their revenue increase as the cost of living increases. With the advantage of BTR being a business, owners and investors take part in capital depreciation; the ability to participate in tax deductions for things like depreciation and interest expenses. The benefit of writing down depreciation against your income justifies the BTR multifamily real estate class paying minimal tax.

1. Enjoy Income Immediately

Let’s look at stock dividends. Most dividend yields hover around 4% or even less on an annual basis. While that number is certainly better than the current savings account rate of 2%, it’s nothing to write home about. Sure, the stock price could increase over time, but until you sell it that money isn’t realized.

However, when you invest in a multifamily deal, you start receiving income almost right away. Investors are getting distribution checks every month, since the property is making money every month (mainly from tenants’ rents). As a sponsor, I wouldn’t go near a deal that had a 4% return, and neither would my passive investors — not when you consider that we’re looking at an average of 7% cash-on-cash return. Since multifamily return is realized almost immediately, this is a superior investment compared to the stock market. As a bonus, many properties may continue to appreciate in addition to the regular returns.

2. Easy Financing

When buying a multifamily property, you can secure a loan for the purchase at a very low interest rate. In fact, rates are now hovering at historic lows. This is simply not available when buying stocks. In addition, you can refinance the property in order to pull out equity tax-free.

3. Depreciation And Capital Expenditures

Unlike the stock market where you pay capital gains on profits, multifamily properties let you pay little to no tax on capital gains by reducing depreciation and capital expenditures (called CapEx) from the property’s income. This can result in huge profits for investors. CapEx are funds that can be used to acquire, upgrade and maintain a property.

4. Add Value To Your Purchase

Value-add multifamily properties are those you purchase with the intent of making needed repairs or upgrades. Not every sponsor or investor has the ability to do this, but it’s one of the best reasons to consider purchasing a particular property. Adding value helps to justify rent increases, which adds income to your return. It also helps with the property’s appreciation over time.

There are many different ways to add value, from exterior improvements like landscaping and painting, to complete unit upgrades like new kitchens and baths. Adding new technology is another draw for renters, and adding amenities like in-unit washers and dryers is another way to increase rents.

Needless to say, purchasing stocks does not allow you to add any value to it, since you have no control over the company’s management and strategy.

5. Gain Leverage 

If you purchase stock on margin, you’ll need about $50,000 in order to buy $100,000 worth of shares. The problem comes in if the stock loses value, which means you’ll have to come up with more cash or the stock will be sold to cover your position.

The beauty of investing in real estate is that you can participate with far less money than stocks. If the property’s value drops, for example, the only time it will be a problem is when the property is actually sold. However, with real estate, you can always buy and hold the property until such time that the value increases.

There are a few reasons why multifamily property investments tend to be better: income reliability, quantifiable appreciation metrics, scalability, and economies of scale.

Income reliability

The benefit of income reliability is inherent in the property types themselves. As the type denotes, a single-family home is often owned by, well, one single family. If that family can no longer pay their rent or decides to move, your income stream collapses. But you are still on the hook for all the bills. You can’t tell your bank, “The renters didn’t pay so I don’t have to pay you!”

With multifamily properties, just like it is sometimes hard to achieve 0% vacancy all the time, you are equally unlikely to achieve 100% vacancy. Some people will always be renting in the building, which means you will have some income coming in to help cover your expenses. Multifamily units are seldom in a position where the owners have no income to pay their expenses. That makes it a less risky and more stable investment overall.

Forced appreciation

Secondly, multifamily real estate has more quantifiable appreciation metrics. Usually, the value of a multifamily building is directly proportional to the income it generates. A building that can provide $1 million income in a year will naturally be quite a bit more valuable than a building that makes $10,000 a year. If you are a multifamily investor, you have the opportunity to force appreciation of a property to increase the income of the asset through operational efficiencies, renovations and marketing strategies to increase the value of the property.

On the other hand, single-family homes are at the mercy of the “comps” of properties within the same neighborhood, general supply and demand and other market conditions completely outside an investor’s control. These are all things that will directly impact your home’s resale value in ways that are tough to quantify.

Economies of scale

Investors will benefit from cost savings per unit when it comes to multifamily investing. Economies of scale are referred to as the cost advantages businesses gain when production becomes efficient. In other words, there’s a cost-savings per unit due to a larger size or quantity produced. When considering acquiring apartments, contracting out rehab projects, maintenance and cleaning companies will be less expensive due to the more considerable amount of units.

Scalability

Investing in multifamily real estate allows investors to grow their portfolios more quickly than with single-family homes. Buying and maintaining 20 single-family houses would be less efficient and profitable than acquiring and operating one 20-unit property. Would you rather have 20 different mortgages and investment strategies or one?

Here are four reasons multifamily is the investment of choice in 2022.

Stability, Stability, Stability

As the market remains unpredictable, investors are looking for something that provides consistent income. If you’re renting out a single-family home and the tenants suddenly aren’t able to pay their rent anymore, you’re still on the hook for the mortgage as the owner of the house.

But in a multifamily property, there will always be income. Rocket Mortgage captures it well: “Multifamily properties offer multiple rental units to rent out [and thus] can also generate several multiples’ worth of additional income in the end. Likewise, having the ability to rent out several units versus a single unit also provides real estate investors with multiple opportunities to reduce vacancy rate, allay their expenses and offset general risk.” With reliable and ongoing income—such as regular cash flow, appreciation, mortgage pay down, and annual tax advantages—this investment is notably less risky.

The pandemic has only accentuated this stability. While COVID-19 shook the economy to its core, one thing remained strong: investments in the basic need of shelter.

It’s Easier To Build A Portfolio

Which makes more sense logistically: buying 20 single-family homes or one 20-unit apartment building? It’s certainly easier to secure one loan, oversee one inspection, and work with one seller. The alternative is working with 20 different sellers, with 20 different loans, and managing 20 different properties at multiple addresses. It’s significantly simpler to buy one property with 20 units.

This strategy is also much easier to scale. Twenty properties is a great start, but if the eventual goal is 100 or 500 units, it’s close to impossible to manage that number individually. But managing 5 buildings of 100 units each is actually doable.

You Don’t Have To Be The Property Manager

When you’re managing a handful of rental properties, many times it’s cost-prohibitive to hire a property management company to handle day-to-day operations. But with an apartment building, the stakes are different. As Investopedia states: “The amount of money that multifamily properties produce each month gives their owners room to take advantage of property management services without the need to significantly cut into their margins.”

It’s More Affordable Than You Think

Buying and owning an apartment building might sound cost prohibitive, but in reality, multifamily property investments are quite attainable for many individual investors. Many apartments and office buildings are owned by a group of individuals, thus opening up the opportunity. Usually, there is one general partner (GP) that manages all aspects, from finding the building to maintaining it. The GP then finds limited partners to join the investment who write a check to join the limited partnership and then watch it (hopefully) appreciate.

1. Cash Flow First and foremost, a multifamily property is a business that offers the ability for cash flow from tenants paying the rent and other income streams above the operating expenses of the property.
2. Appreciation Multifamily is an income-driven asset. There is the ability to force appreciation of the property by doing renovations that benefit the bottom line of the property. There is also the inherent ability to capture market appreciation as it happens.
3. Depreciation One of the biggest benefits that brings investors to the multifamily space is the ability to accelerate depreciation using a cost segregation study. This can be a vital tool for investors who are subject to large upcoming tax consequences and can be executed almost immediately after purchasing an asset. This allows them to reduce their near-term tax burden and put money into other investments to increase returns.
4. Portfolio Diversification Many investors have easy access to traditional investment vehicles like stocks, bonds, or cryptocurrency. However, multifamily provides an opportunity to invest in hard, tangible assets in a different arena. This coupled with the fact that housing and shelter are basic needs common to every person provides a secure way to diversify investing portfolios.
5. Tax Advantages When considering investment moves, tax strategy becomes a critical piece of the whole puzzle. Multifamily assets offer a plethora of tax advantages that can be instrumental to rounding out investment strategies.
6. Demand > Supply The appetite for home ownership in Millennials is half of the national average at just 35%. Millennials value flexibility and mobility over property ownership. Boomers are quickly entering the rental market as many reach retirement and liquidate their homes to access capital while many others seek to downsize and reduce their home and yard maintenance responsibilities.
7. Less risk: When investing in single-family rentals, income is lost when the home is vacant. However, because multifamily properties have numerous units, you can offset the loss of income from one vacant unit with the income from others.
8. Multiple Exit Strategies Multifamily properties usually offer a variety of different exit strategies for real estate investors. You may just sell the property. Alternatively, you may convert units to condos and then sell them individually for a lot more money