How much can I expect to make if I Invest with you?

One of the most common questions that we get asked is, “If I were to invest $50,000 with you today, what kinds of returns should I expect?”

We get it. You want to know how hard real estate syndications can make your money work for you, and how passive real estate investing stacks up to the returns you’re getting through other types of investment vehicles.

In order to help answer that question, you should first know that we will be talking about projected returns. That is, these returns are projections, based on our analyses and best guesses, but they aren’t guaranteed, and there’s always risk associated with any investment. The examples herein are only meant to provide some ballpark ideas to get you started.

In this article, we’ll explore the 3 main criteria you should look into when evaluating projected returns on a potential real estate syndication deal.

Three Main Criteria
Each real estate syndication investment summary contains a barrage of useful data. Focus on these core concepts:

1. Projected hold time
2. Projected cash-on-cash returns
3. Preservation of Capital

Projected Hold Time: ~5 Years
Projected hold time, perhaps the easiest concept, is the number of years we would hold the asset before selling or refinancing it. What this means for you is that this is the amount of time that your capital would be invested in the deal.

A hold time of around five years is beneficial for a few reasons:

1) Plenty can change in just five years. You could start and complete a college degree, move, get married, or …you get the point. You need enough time to earn healthy returns, but not so much that your kids graduate before the sale.

2) Considering market cycles, five years is a modest stint in which to invest, make improvements, allow appreciation, and exit before it’s time to remodel again.

3) A five-year projected hold provides a buffer between the estimated sale and the typical seven- to ten-year commercial loan term. If the market softens at the 5-year mark, we can opt to hold the asset for a longer period of time, allowing the market to rebound.

Projected Cash-on-Cash Returns: 10%-12% Per Year

Next, consider cash-on-cash returns, otherwise known as cash flow or passive income. Cash-on-cash returns are what remain after vacancy costs, mortgage, and expenses. It’s the pot of money that gets distributed to investors.

If you invested $100,000, and earned ten percent per year, the projected cash flow would be about $10,000 per year or about $883 per month. That’s $50,000 over the five-year hold. Steady income that you can use to support your lifestyle month after month. Significantly higher than most other commercial real estate investment.

Just for kicks, notice the same value invested in a “high” interest savings account (earning 1%) over five years would earn a measly $5,000.

That’s a difference of $45,000 over the span of 5 years!

Preservation of Capital:
You receive exceptional steady returns on your money and have all of your initial investment returned to you upon sale or refinance of the property. Alternatively, you may have the option to roll your money into another high yield investment with us if you prefer.

This is money in your mailbox every month without the extreme volatility and uncertain returns of the stock market. This is the type of steady cash flow you need for the stable, secure retirement you are looking for.

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