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Investor Scenarios - A Look At How Real Estate Syndications Could Change Your Life

Updated: Apr 9, 2020

Check out the investor profiles below to help you get a sense of how your money can grow with a real estate syndication


  1. Couple who is “doing everything right” financially discover a way to have more “Play money”

  2. 30 yo Woman looking for a plan to retire in 25 yrs discovers how to do so with just a one-time 100k investment that she received from her father as an inheritance

  3. 35 yo Male finds a way to get the seed money to invest from his whole life insurance policy

  4. 50 yo Female discovers a new way to retire sooner than she originally thought possible

  5. Couple discover a way to take a “Gap Year” and later 1031 exchange their way into a syndication

Investor # 1

Tyler and Kelly have heard that owning real estate can help them build wealth and retire richer. They started saving a few years ago to purchase an investment property. They had put some of the money in a CD and it’s maturing soon, so they are looking at options to buy something, but are overwhelmed with the possibilities. They are concerned about how much work it will require and are worried about unexpected expenses.

Life is already busy and expensive. They have 3 beautiful children, all in private school. They are maxing out their 401K and have started 529 plans for their children. They feel like they’ve been doing all the right things, but they just don’t have enough money left over at the end of the month to enjoy life’s simple luxuries. And the reality is that they don’t really want another job, but they do want to put their money to work.

Tyler and Kelly discovered Real Estate Syndication and have decided that investing passively was probably the better way to go. They had saved up $150,000 that they were going to use to purchase a property and were thrilled to learn that they could receive a monthly cash flow of $1000 or $12,000 annually (8% cashflow). They immediately started a Family Fun Account and decided to make it a priority to take at least one big family vacation per year and to have more frequent Date Nights and Family Outings.

At the end of the 5 years, they will get back their initial investment of $150,000 plus an additional $70,000 – $90,000 for a total average annual return of 17-20%  ($277k - $300k total over 5 yrs).  They have decided to roll their initial investment plus the proceeds of the sale ($220k-$240k) into the next deal so they can continue to receive fund their Family Fun Account as well as grow their nest egg.

They had been focused so heavily on being able to retire comfortably, that they forgot to enjoy the journey. So they are thrilled to be able to have cash flow now without the fear of jeopardizing their future.

Investor # 2

Marsha plans to retire in 25 years. She has been saving money in her retirement account but is a little worried about what would happen in the case of a recession with potential stock market dips and whether or not she is saving enough. She wants to diversify her portfolio but is very risk-averse and has not found an investment opportunity that she’s comfortable with. She has been learning about syndication and thinks passive investing may be the way to go, but she hasn’t pulled the trigger.

Marsha is distraught to learn that her father has passed away. He wasn’t wealthy, but he worked hard and was able to leave her a $100,000 inheritance through a life insurance policy that he had. Marsha thinks this is the perfect opportunity for her to dip her toe into passive investing. She invests the $100,000 and re-invests the monthly cash flow so that she can focus on growing her nest egg. Her project was able to provide an 18%  average annual return. So in 5 years, her $100,000 has become $190,000. With similar returns, Marsha is astounded with how much her initial investment has the potential to grow over time. And to think she isn’t putting any of “her own money”.  After 10 yrs, $361,000     After 15 yrs, $685,900   After 20yrs –1,303,210     After 25 yrs - $2,476,099 If only her father knew the impact that his gift would have. He thought he was leaving a “measly” $100k, little did he know, he would provide Marsha with almost $2.5M in additional retirement income.  That is truly life-changing. Marsha has a completely different outlook on life and realizes that it doesn’t have to stop there. She can continue to invest even through-out retirement and leave a huge nest egg for her children. Now she understands the term “Generational Wealth”.

Investor Scenario 3

Michael also wants to retire in 25 yrs, he has similar concerns to Marsha, not sure what will happen with the value of his 401k, and is concerned that he might not have enough to retire.

After graduating from grad school, his life insurance agent explained that life insurance was a tool that the rich use to build generational wealth and that he could access the cash during his lifetime. He bought into the idea but wasn’t really sure how exactly it would work out for him. Lately, his friends have been telling him that his whole life policy was a terrible decision and he should get out. He started doing some research and decided that if there was a way he could put that money to use, it might be worth it to hold onto. And that’s when he heard about syndication.

Michael had saved $50,000 in cash value and decided to borrow against the policy to fund syndication. The insurance company charges 5% interest. Michael would be earning 8% interest annually. He pays the 5% interest on a monthly basis and sets aside the 3%. So he’s been able to set aside $1500/yr or $7500 for the life of the investment (5 yrs). At the same time, he decided he was going to start saving $600/month to invest in the next deal. At the end of the 5 yrs, he has $36,000 ($7200/yr). When the property is sold, he gets his initial investment, plus an additional $6000. He pays back the life insurance loan of $50,000. .Now has $49,500 which is just shy of the $50,000 minimum to invest in the next deal. By thinking outside of the box and getting creative, Michael was able to come up with the minimum investment.

In a similar fashion, Michael could come close to doubling his money every 5 yrs (Or in half the time with some deals), Michael could have over $1.5M in 25 yrs with just his initial $50k. Now imagine if he.invested more than just $50k or if he continued to invest smaller chunks over time?

And now that he understands the best use of it, he could continue to invest with the cash in his life insurance policy, or he could move on now that he’s “got his money’s worth” and has the seed money to fund his new passive real estate investing journey.

In our opinion, whole life insurance on its own is not an investment. So when compared to other investment opportunities, it will always underperform. When you think of it as a savings vehicle to fund investment opportunities that also provides a death benefit( Which is good if building generational wealth is a priority), then it could be a good thing to do. But in our opinion, it only makes sense when you are maxing out 401k plans, etc. and are looking for additional places to stash your money, get tax shelters, etc.

Investor #4 

Kelly is 50 years old, her daughter just graduated from college so she’s an empty-nester. Her daughter landed a new job as an accountant, moved to a new city, and has become impressively independent. While she will miss her daughter, She is thrilled to be relieved of her financial parenting duties, feels like she has a new lease on life and is looking for a new sense of purpose. She would love to retire early, travel more, paint, volunteer, and pursue some of the things she is passionate about. She has calculated her expenses and thought about the lifestyle she wants to live and has decided that she can live comfortably on $6,000 per month or $72,000/year. Her car and house are paid off, so really she just needs food, utilities, health insurance, etc.

She is confident about the nest egg she has built but is concerned that if she retired early, she would outlive her retirement savings. Kelly learned about syndication and decided to explore how it might help her get out of the rat race and into living the life of her dreams.

She has $2.5 Million in retirement savings. She has decided to take $1 Million to invest in several syndication deals. Kelly decides to rollover the $1M into a self-directed IRA so that she can invest.

She invests the $1 Million across several deals and is receiving a monthly cashflow total of $6667 or $80,000 annually. At the end of 5 years, she gets $1.6 M (Her initial investment plus and an additional $600k). So Kelly was able to live comfortably for the past 5 yrs, AND her money grew instead of being depleted. She is ecstatic that she discovered this new way of life. She can’t wait to tell her daughter!

What if retiring was a real possibility sooner than you had ever imagined?

Investor #5

Kiana and Fred Just finished graduate school as nurse anesethetists and have been working for a year. They met at their first jobs after nursing school, quickly moved in and bought a duplex together so they were living for free.

Fast forward, They are both 35 yo and had worked for about 10yrs as registered nurses before starting anesthesia school. They were super savers so they were able to amass $500k in their retirement accounts.

They are getting ready to start trying for kids, and they thought, wouldn’t it be amazing if we could take a sabbatical from all our hard work and travel Asia for a year before having children.

They have a friend who has been telling them about investing passively in syndication and showed them the returns they have been getting. They decided to take a chance, because yolo, and life is about getting really different for them, so they take the plunge.

They rent out their house, put their stuff in storage and set off on the journey. They are used to a frugal lifestyle and learned than Asia, they could live comfortably on $2000/mo or $24,000/yr.

They take $300k from their Roth IRA, which gives them a monthly cash flow of $2000. All of their family and friends have been telling them they’re crazy and try to poison their plans with all the what-ifs. They have a $50,000 emergency fund and $150k in equity in their home, so they aren’t too worried. Worst case scenario, they come home and go back to work. Fast forward a year - they did it! And they had the time of their life. They come home, start working again and not long after learn that they are pregnant. They decide to move to where Kiana is from, to be closer to her parents so they can help out with the baby.

They don’t want to deal with renting it out long-distance, so they decide to sell. Their small town had a big boom and their property appreciated significantly since they bought it 8 yrs ago. They are concerned about paying taxes on their gains, and heard about a 1031 exchange. They decide with the new baby, they don’t really want to be landlords anymore because, while it allowed them to live for free, and was perfect for that season of their life, it’s now a headache they would rather live without. Parenting will be hard enough.

They want a way to continue to invest in real estate but decide it would be better to invest passively. They hear a friend tell them they can 1031 into a syndication and there just happened to be an opportunity coming up. So now they have money invested in 2 places.

Fast forward 5 yrs and the project is coming to an end. They get back their original $300k plus their share of the appreciation and they have discovered a whole new way of life! 

Investor # 6

Laila just had her fourth child. She feels like things raising the first three were a blur because she was constantly working and trying to keep up with mommy duties that she didn’t get to spend enough time just enjoying them. She is approaching the end of her maternity leave and is having a really hard time going back. But what if she doesn’t have to?

Her husband, Toby recently sold his company and got $1,000,000 from the sale. He initially thought about splitting it up between their retirement fund and college funds for the children, but upon speaking with friends, they decide if there’s a way they can Laila home, investing in syndication is a better way to go.

They invest the $1M in syndication and are able to get monthly cash flow of $6,6667 or $80,000/yr. While it doesn’t quite replace Laila’s income, when you consider the money they would save on child care, they decide it’s worth it to have her home and spending more time with the family.

Laila is ecstatic that instead of rushing back to work, she can savor this precious time with her newborn and get more involved with the older children. And she’ll even get to build in a little “ME Time” with the occasional babysitter. Work will always be there, and she can dip her toe in per diem or go back when she feels she’s ready.

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