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How to Start Investing in Multifamily Syndications: Uncover Your Funding Options



So, you've chosen passive multifamily syndication as your investment route, but the hurdle is the lack of an immediate $50,000 set aside for the typical 3-5 year investment cycle. The misconception that only the affluent can be investors is unfounded, and there are alternative funding avenues worth exploring.


Consider these funding methods to kickstart your multifamily ownership journey:


1. 401K Rollover:

  • Utilize funds from a past job's 401K account. If you haven't transferred these funds, this could be a viable source and be sitting in an account untapped to their earning potential.

2. Self-Directed IRA (SDIRA):

  • Explore a Real Estate IRA for more investment flexibility within your retirement accounts. Many investors use their retirement accounts to source equity, placing it into a Self-Directed IRA which allows more flexibility in their investment choices. This type of IRA is often referred to as a “Real Estate IRA”.

3. 1031 Exchange:

  • Opt for this strategy to reinvest funds from other properties and defer capital gains taxes. Grow money you'd otherwise be giving to Uncle Sam and defer those taxes to a later date, or not at all through your heirs step up in basis.

4. Stocks Funds:

  • Liquidate your stock holdings and use the proceeds. Note the settlement period after selling stocks. Stocks not earning dividends could be earning monthly or quarterly distributions in a real estate syndication, with additional tax benefits.*

5. Home Equity Line of Credit (HELOC):

  • Leverage the equity in your current home or rental properties by securing a loan.

6. Equity from Existing Properties:

  • If you're an active real estate investor, sell or refinance your current properties to invest passively. Many investors are ready to take a less active role and invest via selling or refinancing their current properties to invest in opportunities that put their money to work for them.


Concerned about tying up your capital? While the typical investment cycle is 3-5 years, emergency situations may arise. In such cases, you can explore selling your share of equity to current investors. The specifics vary by deal, so consult with sponsors to devise emergency strategies aligned with your investment.


With these funding options, you have several avenues to kickstart your journey towards financial freedom. We are committed to assisting our investors in fostering positive wealth growth. If you have more questions or need guidance, we're here for you.


Cheers to Your Success!


Interested in investing in our properties? Sign up for our Investor Portal to be notified of new opportunities as soon as they become available. Syndications typically fill fast!


*We are not tax professionals and info provided here is to not be considered tax advice. Please consult a qualified tax advisor to discuss your unique tax situation

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