Frequently Asked Questions (FAQs)
Why to invest in Multifamily Real Estate? What is IRR? What is Prefered Rate of Return?
If these are some of the questions lingering in your mind, we have compiled several such FAQs and have answered them for you.
Multifamily is another term for apartments. There are smaller multifamily properties, duplexes and four-plexes, and larger, commercial multifamily which consists of anything from 5 units and above.
Multifamily real estate offers tremendous advantages as compared to other assets classes like stock markets, forex market, cryptocurrencies and even the sub-domains such as single-family investing or fix and flip. First of all, it strengthens your portfolio as a tangible asset with minimum volatility. While you get to invest in a stable asset, it provides you with regular passive income every month from rentals while creating an opportunity of wealth creation as the value of the assets grows over a period of time. That’s not the end, you can claim tax benefits and invest in real estate without having to worry about property management.
Put simply, syndication is a pooling of investors’ capital to take advantage of the economies of scale and purchase a larger asset, such as a large apartment building. As a limited partner passive investor, your money is invested alongside dozens of other investors in a single commercial asset (such as an apartment building).
As a passive investor, you won’t have any other active responsibilities in the deal. The FWCI team will manage the asset on your behalf.
A preferred return – often called “pref” – is the claim on profits given to preferred investors in a project. The preferred investors will be the first to receive returns up to a certain percentage, generally between 6% to 8%. Once this profit percentage is achieved, the excess profits are split among the rest of the investors as agreed upon in negotiations. This type of return is most commonly used in real estate investments.
To be an accredited investor, you must EITHER have a net worth of $1M+ (not counting your primary home) OR have an annual income of $200K+ as an individual ($300K+ for joint income) over the last 2 years, with the expectation of the same income in the current year.
No, you don’t need to be an accredited investor to sign-up with us. However, certain deals will be open to accredited investors only.
A classification of investor indicating someone who has sufficient income ($100K+), capital (liquidity to invest), experience, education within the investment class, and net worth ($350K+) to engage in more advanced types of investment opportunities.
It’s been suggested that you consult with your CPA to get the most accurate tax information for your unique situation.
As a real estate syndication investor, you’ll gain the tax benefits of property ownership, including accelerated depreciation and cost segregation, which can help lower the taxable passive income you receive.
Each year, you’ll receive a Schedule K-1 tax form to include with your tax filings. This form reports your income and losses for the investment.
If you happen to be a real estate professional, you may be able to apply these paper losses to your ordinary income as well. Again, please consult with your CPA for detailed related to your specific financial situation.
Getting started is simple! Begin by signing up at our portal. We’ll reach out to get to know you better and discover your investing goals. Then, when we find an investment opportunity that matches your objectives, we’ll share the details with you! And remember: signing up with us is free and there are no commitments to invest.
In general, if you can purchase a multifamily property at a 4%-6% cap, it can provide with tons of room to upside cashflow potential and better ROI (return on investment).
In general, a “good” cash-on-cash (COC) return in multifamily real estate will be in range between 7-12%. However, although COC return may be considered good, multiple factors need to be analyzed alongside it.
Bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as machinery, rather than write them off over the “useful life” of that asset. Bonus depreciation is also known as the additional first-year depreciation deduction. This is an excellent, legal way of writing off your cash flow distributions. Please consult with your CPA.
Discover the Ocean of Opportunity in Multifamily Investments
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