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Investing in Real Estate Syndications: A Long-Term Strategy for Financial Security

by | May 13, 2024 | 0 comments

Fifty thousand dollars is a LOT of money. Nevermind fifty thousand dollars per year. I get it, but hear me out. In these challenging economic times, it’s natural to feel hesitant about investing.

 

However, if you keep your eye on the horizon and focus on the long-term benefits, consistent real estate investing can be a powerful way to secure your financial future.

 

Once you see the potential results, I strongly believe you might be more willing to put forth the effort required to get there.

 

I’ve seen regular people with regular salaries (even teachers!) do this and change their trajectories forever. So, as with most things in life, it’s about resourcefulness, not resources. You can do anything you put your mind to, and seeing the progression of investing in syndications year after year might help you put your mind to it.

 

Here’s what could happen when you invest $50,000 a year into real estate syndications, even during difficult economic periods:

 

YEAR 1

While the first year may not be that exciting, it’s definitely an accomplishment to invest your first $50,000. It’s also pretty cool to invest in that first property. Let’s pretend you select a new build to rent community in Greenville Soith Carolina ranked the #2 emerging multifamily market in the US in 2024 by Multi Housing News.

 

Soon afterward, you begin to receive $625 per quarter in distribution checks, which is about 5%, an average year one cash on cash return for most of our deals.

 

A nice, modest start at this point.

 

YEAR 2

In the early spring, you receive your first Schedule K-1, which is the tax document that shows your income and losses from your first investment. We’ll call that Greenville BTR duplex asset from year 1 property A.

 

Through the magic of our tax system, accelerated depreciation, and cost segregation, your K-1 for property A shows hefty paper losses, even though you enjoyed a nice $625 a quarter since the deal closed. Those paper losses allow you to offset both your investment income and your regular income as well.

 

This same year you invest another $50,000 into syndication B, which bumps your quarterly cash flow from real estate syndication investments to $1250 ($625 from each property, A and B).

 

YEARS 3-10 (Condensed for brevity)

Over the next several years, you continue to invest $50,000 annually into new syndications, while some of your earlier investments complete their life cycles and are sold, providing you with substantial returns to reinvest. By year 10, you have over $880,000 invested in multiple real estate syndications across various markets and asset classes, producing approximately $50,000 a year in diversified passive income per year. That’s more than the median household income in the US!

 

WHAT LIFE LOOKS LIKE IN YEAR 10 AND BEYOND

At this point, you earn passive income of over $50K per year, and that figure grows every year. You love your chosen career, so rather than quitting, you opt for a freelance lifestyle, giving you more flexibility to take longer trips with your family.

 

You enjoy fun once-in-a-lifetime experiences, travel, swim with dolphins, enjoy yoga retreats, and stay in a glass igloo so you can dream beneath the Northern Lights. Good thing for those monthly distribution checks!

 

Most importantly, you rest easy with the confidence that you’ve created a lasting legacy for your heirs. Someday, they’ll continue to invest and build their own passive income. You won’t have to worry about being a burden on them in your old age.

 

CONCLUSIONS

Investing passively in real estate syndications is NOT a get-rich-quick scheme. Quite the opposite, in fact. Investing in real estate syndications is a long-term strategy that should result in building wealth slowly but steadily over time, even during economic downturns.

 

By keeping a long-term perspective and consistently investing in real estate syndications, you can weather market fluctuations and build a stable, diversified passive income stream. This approach allows you to secure your financial future and enjoy the benefits of real estate investing without the day-to-day hassles of property management.

 

Remember, the path to financial freedom is rarely well-trodden, but by following this stable, intentional, and low-hassle method of investing $50,000 at a time, you can begin your syndication journey with confidence. Together, let’s look forward to the next ten years of growing our passive income and wealth, one investment at a time.

 

To learn more about real estate investing and syndications, reach out to us at https://investwithspark.com/contact/ today!

 

 

 

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