[Transcript Summarized – How to invest $100K in Multifamily Investing] If you had $100K to invest, let me show you the incredible potential it holds when investing in Multifamily Investing. But first, let’s address the purpose of these videos. We believe that education is key, especially when it comes to investing your hard-earned retirement funds. Our aim today is to guide you through the intricacies of real estate investment, sharing our years of experience and knowledge to help you become a savvy investor.
If you Invested $100K in one of our Latest Projects
Now, let’s focus on one of our latest projects as an example, the Texas 3-Pack. If you invest a hundred thousand dollars into this venture, here’s what you can expect in terms of cash on cash returns. In the first year, you’ll receive a solid 3.49%, which amounts to$3,400. As time goes on, the return increases to 5.7% in the second year and 7.27% in the following years. This upward trend is made possible through our value-add investing strategy, where we reinvest millions to enhance and secure the property.
Return on Investment
But you might ask, “When do I get my money back?” Well, we prioritize return of capital, ensuring you receive your investment in due time. We understand that investing is not just about numbers; it’s about giving you peace of mind while maximizing your returns.
In this specific example, you’ll get your $100,000 back in year seven when we sell the property. And not only that, you’ll also receive profits from the sale. So, throughout the holding period, you’ll enjoy cash flow and net proceeds from the sale. These three income sources – cash flow, initial investment return, and sale profits – collectively provide the total returns for investors. When we look at average annualized returns, it’s about 17% in this particular example. To put things into perspective, the historical S&P returns in the stock market typically range from 6% to 8%. Therefore, investing in this property outperforms the stock market.
The Benefits of Refinancing with Multifamily Investing
Now, let’s move on to discussing the benefits of refinancing for investors. Refinancing is an exciting process as it involves putting a new loan on the property, which allows you to extract money based on its higher valuation. Let’s say you receive $100,000 from this refinancing. As a result, your returns are infinite – it’s like having extra money in your pocket.
What if I don’t currently have any money invested, and I’m still waiting to recover my initial investment? For those of you who are mathematically inclined, think of dividing by zero – it results in an error. But in this case, it’s a pleasant surprise. You still have ownership in the existing deal, and continue to receive cash flow and net proceeds when we eventually sell. That’s the power of commercial investments, particularly the type we call a legacy investment. It allows us to enter a deal, pull out the investors’ money through refinancing, and yet everyone still enjoys ongoing distributions.
Residential vs. Multifamily Investing: Which is Best for your $100K Investment?
So, let’s say you have $100K and you’re considering residential versus multifamily investments. Here are the differences: with residential, you’re typically limited to properties under $400K and require a 25% down payment. On the other hand, with our syndication model, we pool our equity, allowing us to purchase larger, higher-quality assets. This approach affords us the luxury of having a full-time staff, acquiring properties in better locations, and getting more creative with our investments. The value of a house, for example, is primarily determined by its location and the income it generates, unlike individual houses in a neighborhood that are capped by their market values. When commercial real estate, the value is driven by the income generated from the property, making it a superior investment choice.
Ready to Invest in Multifamily. Get Started Now.
So, how does one get started? If you’re interested in Multifamily investing and optimizing your $100K returns, you’ll need to fill out some paperwork, sign it, and wire transfer your funds. It’s a simple process. Typically, investors in this field range from business owners to doctors, lawyers, and engineers. These individuals are high-income earners looking to diversify their portfolio with long-term wealth in mind. It’s important to note that commercial real estate is not a get-rich-quick game, but rather a means of building wealth over time. It’s common to utilize mechanisms like IRA investments or 1031 exchanges. If you’re ready to invest in Multifamily, reach out to us!