Passive Real Estate Strategies: Investing in Syndications and Funds

Are you looking for reliable and proven ways to make passive income through real estate investing? In this episode, Justin will discuss three major strategies investors can use to generate returns from their investments. He covers cash returns from rents, forced and market appreciation, and tax benefits. Plus, as a bonus, He provide insight into a secret fourth type of return that many investors don't consider. He shares the details of each method and how to capitalize on income growth and job growth to maximize returns. Tune in to gain valuable knowledge on how you can earn passive income through real estate investing!

 Key Highlights:

[00:01 - 04:19] Unlocking the Potential of Appreciation, Tax Benefits and Operational Efficiencies in Commercial Real Estate

• Look for income growth, job growth, and population growth as it compares to new construction pipeline

• Supply and demand imbalances create natural appreciation in the market

• Depreciation can be used to cover expenses depending on tax position and profession

 Key Quotes:

"For many investors, the depreciation is enough to cover any taxable liability from your passive income gains." - Justin Moy

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

How do you scale in real estate investing from single family to multifamily? In this episode, David Kamara discusses the importance of having a mentor, researching competing properties, and understanding what people are looking for to make successful deals in towns. By investing in areas with cash flow and taking economic diversity into account when evaluating real estate investments, investors can have a buffer should their projections not match up to reality and still benefit from some degree of return. David emphasizes the need to understand a town’s demographics, lifestyle, and population centers within a 20-mile radius. He also suggests considering the operator's risk management strategies, their investment amount, and other investors' recommendations before investing passively. Tune in to hear more of David’s advice on how to succeed as a passive investor in small markets!

Key Highlights:

[00:00 - 07:23] David Kamara: From Single Family Houses to Multi-Family Syndication and Mentoring in Small Town American Markets

• David Kumara has been a real estate investor since 2006

• He has transformed his portfolio from residential, single family, and duplex units to focus on larger multi-family investing, including apartment buildings and town home communities

• He was Justin's first mentor in the multi-family investing space

• David started out as an active investor before transitioning to passive investing

• His most successful properties are in smaller markets and towns

[07:23 - 14:44] Investing in Smaller Markets: How We Found Wildly Successful Deals in Farm and Country America

• Invested in smaller markets, not by design

• Looked at key metrics like price per door and rent per door to determine deals

• Deal was located near two large population centers and a college

• Deal showed well and didn't require much work

• People are moving to certain states for employment and connectivity

[14:54 - 21:41] Avoiding the Risk of Tertiary Markets

• Investors may shy away from investing in tertiary markets due to fear of economic downturns

• Cash flow is an important element of the deals that David invests in, and he personally invests cash in each deal

• The cash flow distributions are typically in the four to five to six to 7% range, sometimes even three in the first year, depending on the strategy

[21:42 - 28:12] Investing in Smaller Markets: What Investors Should Know About Supply and Demand

• Smaller markets often don't have competition for developers

• Investors should look for economic diversity when considering a tertiary market

• Factors to consider include population centers, commute times, and the operator's financial commitment

Key Quotes:

"So you want diverse industries. You don't want just manufacturing or just tourism or just schools and government." - David Kamara 

“I think more than anything, frankly, you wanna look at the operator that you're investing with.” - David Kamara 

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

Are you a career driven individual looking to maximize your wealth without taking on more responsibility or compromising your time? In this episode, Justin will be discussing private money lending and how it can fit perfectly into a passive investor's portfolio. We'll also talk about the benefits and drawbacks of investing as a private money lender, such as the fixed return on your investment, the short-term nature of hard money loans, and the potential to make significantly more than 10% on an equity position if the property performs as expected. Tune in to learn more about private money investments and how you can use them to maximize your wealth without taking on too much extra responsibility or compromising your time!

Key Highlights:

[00:01 - 02:11] Understand the Benefits and Limitations of Private Money Lending for Real Estate Deals with Passive Real Estate Strategies Podcast

• Private money lending can be done entirely by you or in a fund

• Loans are taken in debt position as opposed to an equity position

• Money can be deployed from 6-24 months with a healthy return

Key Quotes:

"So hard money lending is generally safer, has a more predictable return, and is collateralized by the property." - Justin Moy

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

How do you gain insights on strategies and metrics in Real Estate investing? In this episode, Joe Ollis dives into their approach to real estate investing. The Peak Group is a vertically integrated single-family rental platform that owns and operates around 2000 homes across the south of the United States. Joe will discuss how they use both data and boots on the ground knowledge to identify trends in markets such as Dallas, Florida, Charlotte, North Carolina, Tennessee, Georgia, and Alabama. He'll also explain how 65% of their portfolio is currently cash flow positive. Additionally, explore how competition for certain asset classes has driven up prices over the past several months and hear strategies for investing in secondary or tertiary markets where there is less institutional competition. Learn how rising mortgage rates affect home buyers and institutional groups, as well as their strategies for navigating the current market and underwriting properties. Get advice on how to plan for and account for property taxes when underwriting too! Tune in now to get a glimpse into the world of real estate investing through the lens of Joe Olis from the Peak Group!

Key Highlights:

[00:00 - 05:52] Understand Your Sponsor's Market and Underwriting Strategies 

• The Peak Group is a vertically integrated single family rental platform, with a privately traded REIT owning and operating approximately 2000 homes across the US

• Joe's role is to act as a fiduciary to take care of investors' best interests, helping them choose the right strategy for investing in single family rental products

• Joe uses data to identify simple trends and boots on the ground knowledge to identify where to build new product

• 65% of their portfolio is currently in Dallas, with other markets spread through Georgia

[05:53 - 11:43] Competition in Real Estate Market Causes Investors to Re-Evaluate Investment Strategies

• The market has significantly shifted in the last three months

• Competition is high in many markets, making it difficult to compete

• Investors should look into secondary or tertiary markets for higher yields and less cap rate compression

• In early January 2022, rent growth of 9-10% was needed to make a 4.5 cap purchase

• Since January 2022, no purchases have been made due to pricing getting out of whack

• Sellers are not motivated to sell due to lack of efficient capital deployment options

• Fewer buyers on the market leads to lower sales prices

[11:44 - 17:46] Property Taxes Bite Hard: How Investors Can Plan for the Unexpected

• Mortgage rates have increased from 4% to 8%, impacting home buyers and institutional groups

• Investors are able to find good deals in the market by purchasing all cash and refinancing when interest rates lower

• Underwriting boils down to cash yield and undeployed equity, with the biggest lever being the cost of debt

• Property taxes are the number one thing that can screw up a pro forma long term, especially in Texas where they increased 23%

• Investors should be pessimistic when underwriting expenses for property taxes

Key Quotes:

"I think the market has significantly shifted even in the last three months, and we should totally talk about that." - Joe Ollis

“If you're sitting on cash right now and you have the ability to go deploy it, you can find some good deals in the marketplace.” - Joe Ollis

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our

Are you looking to understand the ins and outs of passive real estate investing? In this episode, Justin will be discussing the different deal structures and capital stacks associated with syndication deals. He will discuss Preferred Equity and Preferred Return, two terms that are often used interchangeably but mean slightly different things. He will also discuss the use of waterfalls and hurdles, as well as the catchup pool in a waterfall distribution system. This discussion is designed to help career driven individuals understand passive investing so they can take advantage of these opportunities and determine if it is right for them. Tune in now to gain insight into the world of passive real estate investing!

Key Highlights:

[00:01 - 08:54] Uncovering the Extensive Process Behind Syndication Deals: What Goes Into Bringing a Great Deal to Investors?

• If a property performs as projected or exceeds projections, investors not in the preferred equity pool will make a greater return

• Return of capital needs to be returned first 100% before paying out any distributions

• General partnership had a guarantee of $50,000 in returns per year over a five year period

• GPS get paid out a greater share of profits as property is more successful

• Complex structures should be reserved for sophisticated investors

Key Quotes:

"By doing our physical inspections, that means we're bringing in more contractors, we're bringing inspectors, engineers, or anything else that the property needs." - Justin Moy

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

Do you ever wonder what it takes to bring a real estate deal to investors? In this episode, Justin explores the two-phase process of syndication and how operators need to carefully vet deals before finding a suitable property. He discusses the difficulty of sustaining rent growth when tenant incomes remain stagnant, and how only 1% of all deals meet an operator's criteria. He explains how he uses data such as crime rates, income levels and job growth to evaluate a potential deal. Plus, learn why it can take up to 30 days or more for legal teams to iron out all the details of the purchase and sale agreement. Tune in for an in-depth look at the process for bringing real estate deals to investors through syndication.

Key Highlights:

[00:01 - 02:05] Uncovering the Extensive Process Behind Syndication Deals: What Goes Into Bringing a Great Deal to Investors?

• Process of bringing a deal before investors is extensive

• Two phases: getting the deal under contract and contracted phase

• Finding the deal is the biggest part

• Underwrite a ton of deals to find great deals

• Creating pro forma incomes, projecting expenses, bringing together insurance and taxes, operating expenses

• Analyzing crime, income, job growth, and tenant base

Key Quotes:

"By doing our physical inspections, that means we're bringing in more contractors, we're bringing inspectors, engineers, or anything else that the property needs." - Justin Moy

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

How do you choose between passive and active investing? In this episode, David Robinson shares his story of taking inventory of his life after the passing of his father and how it led him to become an active real estate investor. David provides insight into the pros and cons of investing in real estate. He reveals that there are three different investment styles: active, passive, and something in between. David explains that buying small multifamily properties has its benefits such as getting conventional financing, full control, and the potential for passive income streams. He then dives into three different passive investment strategies he recommends evaluating to find the one that best suits each investors’ lifestyle needs. Lastly, he discusses how market uncertainty has caused investors to be more conservative and look at more than just returns when making decisions. Tune in now to learn how you can get started with real estate investing!

Key Highlights:

[00:00 - 07:45] Taking Inventory of Life: How a Routine Heart Surgery Changed the Course of My Real Estate Career

• 5 years ago, had an "aha" moment to take inventory of life and finances

• Realized he hadn't done enough to build up substantial cash flow and wealth

• Started real estate sales business in 2003

• Pivoted to traditional residential resale and built sales teams

• Had a moment with his dad's heart surgery that made him realize things had to change

• Opened up a small boutique brokerage that focuses on serving buy and hold investors

• Got involved in larger commercial multi-family syndication 2 years ago

• Discussions with investors led to 3 buckets: active investor, passive

[07:46 - 14:57] Exploring the Benefits of Investing in Small-Scale Multi-Family Real Estate: Control, Passive Income, and More

• There are three types of real estate investors: active, passive, and a blend of the two

• The goal of the investor should be determined before deciding which type to pursue

• Passive real estate investing requires effort on the front end

• Benefits of owning a small personal portfolio include: access to conventional residential financing, full control, and the ability to structure deals in a way that is fairly passive

• Investing in master planned fourplex communities managed by an HOA is one way to get close to a passive investment while still owning your own property

[14:57 - 22:13] Navigating the Uncertainty of the Market: How to Build Wealth and Cash Flow in a Buyer's Market

• Investing passively can save time and money, but may sacrifice return

• Every deal needs to be evaluated on an individual basis

• Generally speaking, investing in your own deals will yield higher returns

• The discussion is more around lifestyle strategy than returns

• Uncertainty in the market is causing investors to take a more conservative approach

• There is a gap between what sellers are hoping to get for their property and what buyers/lenders are willing to pay

• Deal volume is dropping off due to sellers not wanting to sell at lower prices

• There is more demand than supply in the market today

Key Quotes:

"If you are willing to be more active and play more roles, then that piece of the pie that would go to that general partner or asset manager, isn't being taken out of the pie." - David Robinson

“If you're a true seller in the market today, you need to price aggressively and get out of that.” - David Robinson

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily

Are you ready to learn how to make your real estate investments work for you? In this episode, Justin dives deep into three key questions all potential limited partners should ask before investing in a passive deal. Learn why current ownership is selling and what obstacles are preventing the property from hitting Pro Forma, plus if it's currently under professional management, why will sponsors or their team be able to manage the property better than the current one. We'll also uncover what could happen if rent prices are raised too high and which expenses are beyond management control. Tune in for this engaging conversation about making the most of your real estate investments and don't forget to subscribe for upcoming episodes!

 Key Highlights:

[00:01 - 06:35] Validate Reasons for Selling and Identify Obstacles to Pro Forma

• Business plan should address all obstacles to getting to Pro Forma

• If property is professionally managed, need to know why current management wasn't able to reduce expenses or optimize operations

 Key Quotes:

"So sometimes burning off loss lease isn't as easy as it sounds or doesn't happen as quickly as you might think it could happen without at least absorbing a lot higher vacancies." - Justin Moy

Download our FREE ebook, The Definitive Guide To Passive Real Estate Strategies.

Check out our Multifamily Syndication Group, and sign up for our NEWSLETTER.

Want to invest with us? Schedule a brief call here. 

Get in touch: [email protected] and let me know what topics you’d like me to cover or what guests I should have on.

If you like our content, please give us a rating on the platform you’re listening on!

In this episode, Trevor Thompson discusses his experiences with passive real estate investing. With over 30 years of experience in a wide range of assets such as multi-family, medical offices, land, and new construction, Trevor shares his insights about the current market and potential risks associated with investing. He looks at total return, specifically Internal Rate of Return (IRR), to measure success and suggest caution when it comes to Airbnb investments due to government regulations that can cause a disruption in business. They also emphasize the importance of doing due diligence when investing in real estate by researching both the syndicator and asset manager of a deal as well as the asset class, location and terms of the investment. Hear Trevor’s stories from 18 syndications and two active investments he has been involved in - including one that gave him a 3x return on his money - and gain valuable tips on how to maximize your returns while minimizing your risk. This episode is sure to provide you with actionable advice on how to make wise investments without compromising your time or taking on more responsibilities.

Key Highlights:

[00:00 - 07:42] Learn How Trevor Thompson Invested in Over 18 Syndications and Won Big with Passive Real Estate Strategies

• Trevor Thompson has invested in 18 syndications and 2 active investments over the course of 30 years

• Investments range from multi-family to medical offices, land, and new construction

• Deals have changed due to lower loan to value and higher investor money requirements

[07:43 - 14:50] Investors Beware: Cash Flow Deals Not What They Used to Be and Airbnb Investing Comes With Risk

• Cost of rent and cost of living are skyrocketing

• Investing in a market that is growing is important

• Returns have changed over time, with less cash flow available

• Focus on total return and Internal Rate Return (IRR)

• Syndicators look for the highest use of money in the shortest period of time

• Multi-family, medical, retail, storage, and Airbnb investments are all options 

• Government action and homeowner's associations can affect investments

[14:51 - 22:00] Investing in Real Estate: Tips for Avoiding Losses and Maximizing Tax Savings

• Advice for getting into the Airbnb game: make sure it works as a long-term rental

• Real estate investing allows for tax savings

• When investing in real estate, research the syndicator and partners to give money to

• Mix up investments with different asset classes and locations 

• Investments can range from luxury living to deep value add

Key Quotes:

"Miscalculation is substantial." - Trevor Thompson

“You could be pretty satisfied with a less return, but a safe return.” - Trevor Thompson