The 4 Ways That Multifamily Real Estate Pays You

The 4 Ways That Multifamily Real Estate Syndication Pays You

When looking for an investment one of the main criteria should be how hard your money will work for you. Passive Investing in multifamily (apartment) real estate syndications is a way to give your money a job so you don’t need to work harder at your current job. Not only does investing in multifamily syndications put your money to work – it gives your money 4 jobs. That’s 4 income streams - passively. Your money will bring you 4 paychecks with each investment, in this article we discuss how.

Cash Flow

One of the first income streams you might think about is the on-going cash flow you get from investing in an income producing property. Investing in multifamily apartments provides monthly cash flow from the residents that are renting the apartment units. After all expenses and loans are paid the remainder is profit. This cash flow is for the investor to keep.

For example, imagine you had a $100,000 house for which you rented out at $1,100 per month. Every time you got that $1,100 you would have to pay $300 for miscellaneous expense, repair and maintenance and hold a reserve for future expenses. Additionally, you would pay out another $600 to cover loan payments and taxes and insurance. This would leave you with $200 profit. This is the cash flow of the property which you can use to your discretion.

One of the wildly powerful things about this cash flow is that if you invest in the right deals you can have an infinite return on investment. Depending on the business plan of the syndication you invest in, the syndicator may renew the loan on the property (i.e. refinance) and in the process of this refinance return to you all the initial capital that you provided. This would mean that you no longer have any capital at risk but are still getting on going cash flow returns. When you do the math even if you were to only get $1 per month that would be an infinite return on investment as you have no capital at risk in the deal.