Question 1

What Is A Real Estate Syndication And What Does It Mean To Be A Passive Investor?

Accepted Answer

A real estate syndication is when a group of people pool together money to purchase real estate. Vidente Capital would be the sponsor (aka managing partner) of the syndication. The sponsor would find a property, make sure it would be profitable, negotiate the purchase, and handle the day to day operations.
As a passive investor, you would simply invest your money, and then you get to sit back and enjoy the returns. Everything would be taken care of by the sponsors and their team, from dealing with tenants to managing repairs. So it truly is “set it and forget it”.
You would receive monthly cashflow checks and regular updates on the progress of the property and when the property is sold, you will receive your initial investment and your portion of the appreciation.

Question 2

What is an accredited investor and do I need to be one?

Accepted Answer

An accredited investor is a single or married individual that makes an annual income (salary, wages,tips, rental income,etc) of $200,000 or more or a married couple making $300,000 or more to qualify jointly. This individual or couple must have made this amount for the past 2 years with expectations of making the same or more this year. Has a net worth exceeding $1 Million when considering all assets and liabilities including real estate (excluding primary residence). While most of our investments are only available to accredited investors, we do offer some investments for non-accredited/sophisticated investors

Question 3

What is the minimum investment?

Accepted Answer

This amount varies depending on the deal, but the typical minimum is $50,000

Question 4

What returns should i expect to receive on my investments?

Accepted Answer

Exact returns will vary from one investment opportunity to the next, but in traditional multifamily syndication deals, the return structure will be similar. You will receive cashflow throughout the lifecycle of the project and then you will receive your share of the profits from the sale at the end of the project. In our free investor course, we show you real deals that are in progress or have been completed and the returns the investors received.

Question 5

What Are The Risks?

Accepted Answer

Commercial Multifamily real estate operates independently of the stock market and does not follow the single family housing market in the traditional sense. The value of the building is determined largely by the income and expenses of the property rather than comps, so it is easier to predict and even influence the value of the property by increasing income or reducing expenses.
With the looming potential for a recession, it’s very normal to be concerned about risk. Historically in recessions, multifamily property has fared better than other real estate asset classes, but no investment is 100% risk free.
That being said, we take steps to minimize these risks. We purchase property that is cash-flowing from day 1 and has a high occupancy rate that will cover the mortgage and still provide cashflow to our investors. We research the neighborhood and screen our tenants, ensuring the best tenant pool possible. We swiftly remove delinquent tenants and improve the property to increase the value and attract the best of the best. We also secure longer term financing than our business plan calls for, in the unlikely event that we need to hold the property longer than expected.

Question 6

If I don’t have to do anything, who takes care of the property?"

Accepted Answer

There will be an in-house leasing agent maintenance team overseen by a property management company. But you’ve all heard the saying “When the cat is away, the mice will play”. No one will work harder to ensure your investment is performing at it’s peak, than you! That’s why our team will have weekly and as needed calls and frequent visits to the property to ensure the business plan is being carried out as expected and to take swift, necessary action, in the event that it’s not.

Question 7

How Long Should I Plan To Have My Money Invested?

Accepted Answer

The typical hold period for most of our projects are 5 years, but may vary with different projects. You should plan to have your money invested for the duration. You will receive regular cashflow returns, but your initial investment will not be returned until the project is completed.
Occasionally, we have projects that are shorter term. And of course those looking for long-term, always have the opportunity to rollover their investment into the next deal.
We suggest that anyone investing have a separate emergency fund to handle things that may come up. That being said, we understand that 5 years is a long time, and sometimes unexpected major life events happen, so we would do everything possible to try to help you get out of the investment if the need arose.

Question 8

What are acceptabe sources of money to invest in your deals?

Accepted Answer

Most investors use cash (money saved or an inheritance) and this will allow the greatest flexibility in how your cashflow returns are used. Many rollover money from their retirement account and invest through a solo 401k, self directed IRA, or an eQRP. The ability to use the cashflow for everyday expenses will likely be limited when investing through an IRA. When we touch base, we can talk about some of the creative ways investors use to fund syndications, such as the cash value in their life insurance policy.

Question 9

What are the tax benefits? And what is an eQRP and how can it help me?

Accepted Answer

The tax benefits of investing in syndications are already incredible, and this just sweetens the deal! Typically you are able to practically wipe out any tax you would pay on your monthly cashflow income by balancing it with depreciation, however you would likely be responsible for paying UBIT on the equity gained upon sale of the property. An eQRP is a specialized type of solo 401k that allows you to eliminate UBIT (Unrelated Business Income Tax). This should not be confused as tax advice. We are not tax professionals, and always advise you to speak to one regarding tax concerns, but we are happy to share our experience and to assist you in setting up an eQRP account if you decide it’s the best path for you.

Question 10

If I join the Vidente Capital Investment Club, am I obligated to invest in the next deal?"

Accepted Answer

Joining the Vidente Capital Investor club gives you the opportunity to see when deals become available, and so you should have the funds to invest when you join, however you are under no obligation. When you give a soft commitment, it tells us that you are ready and able to invest and we take you into consideration when exploring potential opportunities. When you give a firm commitment, this means you have been presented a deal, expressed interest, and are expected to follow through with the investment.

Vidente Capital

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