Iron Point Capital

05/21/2020

What is Multifamily Real Estate Syndication & and is it the right vehicle for you?

WHAT IS MULTIFAMILY SYNDICATION:

Real estate syndication is when a group of investors pool together — or "syndicate" — their equity in order to acquire properties much bigger than they could afford (or manage) on their own

A Sponsor, or “Syndicator,” is the firm pooling investors together. The Sponsor conducts in-depth market research, provides underwriting and due diligence reports, arranges financing and manages the closing.

IS IT RIGHT FOR ME:

Sponsors work to deliver the benefits of real estate ownership, such as monthly income and equity growth through appreciation, while investors avoid the drawbacks of hands-on maintenance and management.

Anyone contemplating a move from the stock market — or out of self-managed property — into a real estate syndication may be hesitant based on limited knowledge about this unfamiliar investment process. But with a little education, an investor can review Sponsors and offerings that open doors to accessing new wealth-building avenues.

Click here to learn more!

05/18/2020

Why invest in a Multifamily Syndication?

Investing in real estate can be very expensive. Multifamily Syndication gives you the opportunity to invest your money in large assets like an apartment buildings that provide economies of scale and are professionally managed. Here’s what’s in it for you when you invest your money in a multifamily syndication as a passive investor.

Cash Flow

Syndications allows you to earn an income without putting any time in managing the property (think purely passive). With the general partners doing all the work, from due diligence to property management, you won’t have to worry about a thing. Passive income is the ultimate way to financial freedom.

Tax Advantages

Multifamily investors are allowed to write off 1/27 of the value of the building each year as an expense. Additionally, you can perform a cost segregation analysis, which results in a depreciation of 90% of the apartment building’s value over seven years.

Risks

Even though you are a partner in a multi million dollar asset, being a Limited Partner shields you from any loan liability or any other legal issues that may come up with the property.

OPS

You’ve heard of OPM (Other People’s Money) but being a passive investor allows you to benefit from OPS (Other People’s Skills). You just have to do your homework in vetting the syndication team and the deal before you decide to invest.

05/16/2020

Sadly, most banks are continuing to pay interest on savings that's some small fraction of 1%. How small? According to the FDIC, the recent averages are 0.09% for savings accounts. With the inflation rate just north of 2%, you're losing money every day you have it sitting in the bank!

Yet, many people believe that saving in a bank account and collecting interest is beneficial to their future, But the key word is FUTURE. If you don’t invest wisely, someone else will. If you’re ok with a 1% return on your investment and have no aspirations of growing your wealth, then by all means, leave that money in a bank account and let the bank use your money to multiply theirs.

It's time to fire your bank, and find someplace else to put your money. Consider Multifamily Real Estate. Multifamily properties offer the best combination of high yields and low risk. With disciplined buying, conservative use of debt, and diversification of assets, you can achieve consistent quality returns of 10%+.

Additionally, demographic and lifestyle trends make multi-family homes more attractive:

✔️Baby Boomers are downsizing.
✔️More people value mobility and flexibility.
✔️Millennials have lower homeownership rates.
✔️Rentership is on the rise in most areas of the country.

05/10/2020

Tax Benefits of Multifamily:

1- DEPRECIATION

Depreciation is an income tax deduction. In short, while real estate values generally appreciate, the physical components don’t. (Roofs, appliances, electrical, etc) The IRS understands and accounts for this by offering an income deduction for owning depreciating assets.

For example, let’s say we buy a commercial property for $10,000,000 and the tax assessor’s estimate the land value is $3,000,000. The land value doesn’t benefit from depreciation but the physical property value will get depreciated over 27.5 years, resulting in a tax loss of $254,545. ($7,000,000 / 27.5 = $254,545)

This means that regardless of the amount of dollars received from cash flow during the hold period, the annual taxable gain will usually be net negative or very close to it! The result, positive cash flow each quarter while still claiming a loss at the end of the year.

In basic terms: Make more and keep more!!

2- COST SEGREGATION

Multifamily investors also get the added benefit of being able to accelerate that depreciation through a cost segregation study. In short, we can hire an engineer to come analyze all of the components of the property separately and have them create a custom depreciation schedule.

The result being the ability to depreciate up to 90% of the building’s value over 7 years.

3- BONUS DEPRECIATION

The Bad News: When you sell the property for a gain at the end of the hold period there will be a tax based on the long-term capital gains rates, as well as a tax for depreciation recapture.

The Good News: The new tax reform bill allows us to depreciate the entire value of a building in Year 1, this is called “Bonus Depreciation.”

This means is we get to carry our passive losses forward until we sell the property and use those passive losses to offset our capital gains!!

05/06/2020

WHY WE LOVE REAL ESTATE OVER ANY OTHER INVESTMENT OUT THERE!!

Real Estate Offers Long-Term Returns vs. One Time Payouts:

When you calculate the value of a traditional asset, say a stock or bond, you’re looking at a one-time cash payout. With real estate, you can buy rental properties with positive cash flow and you never have to sell them if you don’t want to. Keep the cash flowing!

Real Estate Cash Flow Creates Immediate Income:

Stocks pay dividends, but few provide over 4% and that’s barely above inflation. It’s true that a stock could rise in value, increasing the value of your investment, but that money is not realized until you sell the stock. Many real estate investors wouldn’t touch a property if it had 4% annual cash flow. Instead, they want 15-20% or more in cash on cash returns – which makes a meager 4% return look like chump change.

It’s Easy to Become a Local Expert:

You don’t need a degree to become an expert on your local real estate market. You can simply use public information to learn about local property values, area rents, economic conditions and real estate market trends and health. Once you know these indicators, it’s easy to spot a bargain.

Real Estate is Easy to Value:

Unlike intangible assets which can have somewhat arbitrary valuations, properties are easy to value because they are easy to compare.

You Can Inspect Real Estate:

When you buy a piece of real estate you can inspect the property before you buy. On the contrary, you can’t possibly inspect all the pieces of a company to affirm it’s stock valuation before you invest. You have to trust that others have done the legwork for you and that nothing will happen to dramatically impacts the valuation.

You Can Add Value to Real Estate:

Unless you’re in a corporate role for a public company, your opportunities to influence stock value in any relevant way are basically zero. In real estate, however, you have ample opportunity to add value to your assets.

TO LEARN MORE VISIT www.IronPoint-Capital.com

05/03/2020

“Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” -Ronald Reagan

Multifamily Real Estate has been a proven way to hedge against inflation. The stock market has showed us that it's way too volatile .Did you know that inflation makes your stock portfolio worth LESS every year? To find out more about investing with us, visit www.IronPoint-Capital.com

04/23/2020

This is why we LOVE Multifamily Real Estate...

The National Association of Realtors suggests 5 to 6 million new renter households will be created within the next 10 years. It seems Americans aren’t in a rush to buy. In fact, despite eligibility for a mortgage and attaining the necessary funds to purchase, most renters are staying put.

04/14/2020

Looking for passive income??

www.IronPoint-Capital.com

04/13/2020

HOW WE SELECT A TARGET MARKET:

Before electing to invest in a target market, our team performs exhaustive demographic and economics analysis to ensure our investments are located in safe, stable markets with growing population, growing jobs, and diverse employment. For each target market we plan to invest, we produce a market summary report using the following criteria....

1) ECONOMIC CHARACTERISTICS: 5-Year Unemployment, Job Diversity, Top Industries and Employers.

2) POPULATION: 5-Year Population Growth and Age Range

3) HOUSING: 5-Year Median Rent, Rental Vacancy Rates, and Building Permit Data.

4) MISCELLANEOUS: Awards and Recognition, Commuting, Amenities, Crime, and Schools.

04/12/2020

Am I an Accredited Investor?? This is a question that comes up a lot. To clear things up a bit, I’ve included a description of exactly what makes someone an “Accredited Investor”....

An accredited investor, in the context of a natural person, includes anyone who:

Earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
Has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.

In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

Any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
Any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.

To learn more about Investing with Iron Point Capital, visit www.IronPoint-Capital.com