Investors rarely, if ever, begin their career by raising millions of dollars to purchase and manage apartment buildings by themselves, it usually starts with a single-family home and grows from there. But why limit yourself to only the small deals? Kira Golden and the Direct Source Wealth team have a passive investing model for both experienced and first-time accredited investors commonly referred to as “real estate syndication”.
In an apartment syndication, the syndicator (Direct Source Wealth in this example) raises capital from accredited investors to acquire apartment communities while sharing in the potential of future profits. By using this passive approach to real estate investing, it allows the investors to be completely passive and hands-off when it comes to managing tenants and dealing with the day-to-day operations of owning and operating real estate.
Some investors lack the education and experience required to manage and locate commercial properties, while others may have the experience and education, but prefer to be passive in their investing approach. In real estate syndication, both sides (the syndicator and investors) act as a yin and yang to support one another. The passive investors typically provide the majority of the capital to purchase the property, while the syndicator (Direct Source Wealth) often provides a smaller portion of the capital, in an effort to co-invest alongside the passive investors. Direct Source Wealth additionally provides the support team, the experience, and the asset management group in order to successfully operate and improve the properties; making it very easy and convenient for the investors.
It is also worth noting, when an individual begins investing in real estate with a single-family home, they often obtain a mortgage from a bank or lender and put down the capital required for a down payment. Since a single-family home is only one unit and is not necessarily treated as an income-producing property in the eyes of the lender, the investor usually has to qualify for the mortgage loan based on personal credit, income, assets, and liabilities. In an apartment syndication, the investor does not need to qualify based on these criteria, however, the investor does need to meet the criteria for being an accredited investor.
As defined by the U.S. Securities and Exchange Commission rules, an accredited investor is a person that has an annual income exceeding $200,000, or $300,000 for joint income, for the last two years with the expectation of earning the same or higher income in the current year. Alternatively, a person is also considered an accredited investor if he or she has a net worth exceeding $1 million, either individually or jointly with his spouse (excluding a primary residence).
If you are an accredited investor looking to expand your real estate portfolio, you might consider using a syndication model as part of an overall investment strategy. Kira Golden and the Direct Source Wealth Team will handle all aspects of property selection, market selection, real estate underwriting, and the day-to-day decision making that often take up investors’ time and profits. Visit www.directsourcewealth.com for more information.
Direct Source Wealth is a real estate investment firm best known for helping investors create generational wealth while achieving personal financial goals and Time Freedom along the way. The company’s mission is to bring institutional-grade investment opportunities to accredited investors. The investments developed by Direct Source Wealth are speculative in nature and entail significant risks. Past performance is not a guarantee of future returns.
Contact: Dave Grimm