The hold period is typically 5 years. During the first 2-3 years, we get to work renovating the units/exteriors and adding value to the property. The property is re-branded to attract higher quality tenants and higher rent.

A syndication allows you to diversify your portfolio. You have access to different asset classes across different geographic markets that you wouldn’t have with a single family.

An investor has an opportunity to leverage the sophistication, existing processes and established network of an experienced operator. Syndications have economies of scale with multiple units on the property. Expenses are spread out and the value is driven by value-add strategies to force appreciation. Operators have more control increasing the value of a property. Similar to running a business, value is created by increasing net operating income and decreasing expenses.

A single family value is based on local market comps, which can dramatically increase or decrease based on the location and the timing of the economic cycle. If you lose one tenant, you lose all revenue until the tenant is replaced.

Owning a single family rental property typically requires more time commitment. Syndications might be a better fit for busy professionals, because you don’t have to deal with the hassles of being a landlord.

The K-1 is an IRS tax form issued annually for an investment in partnership interests. The K-1 reports earnings, losses, deductions, and credits. K-1 forms are typically distributed to investors in the middle or end of March. Oftentimes, a K1 will show a paper loss even though investors are receiving cash flow due to accelerated depreciation (see cost segregation in the Terminology section). This is one of the great tax advantages when investing with real estate syndications.

Some deals begin distributions within the first quarter, others in 6 to 9 months. Distributions can occur monthly or quarterly depending on the deal and operator.

In a Real Estate Investment Trust (REIT), you’re investing in a company that holds a portfolio of properties. Each REIT specializes in a specific asset class, i.e.apartments, office space, or shopping malls. REITS can accept lower minimum investments and trade like a stock. Capital gains are taxed against your ordinary income. An investor in a REIT, does not have direct ownership in the underlying asset, which means you don’t receive the tax benefits. REITS typically earn fees through transactions.

When you invest in a syndication, investors have direct ownership of the asset, which gives them more control. They have access to the operator and have full transparency to the business plan. They can view details of the operating expenses and revenue. Investors have the pass through benefit of investing in the syndication. Gains can be deferred or offset against ordinary income, depending on an individual’s tax status. Investors are paid first, before we are paid out.

BlueDoor Equity does not provide professional tax advice. Please consult with your financial advisor, CPA, and or tax attorney.

Yes, you can use retirement funds without incurring penalties! This is one of the best unknown strategies for investing capital that is already passively growing for your retirement. Your capital can continue to grow in your retirement when you roll it over to a qualified custodian or provider. Funds can be rolled over to a Self Directed IRA (SDIRA) or a Solo 401K (also marketed and branded as a QRP), which allow you to invest in many alternative assets such as real estate. There are certain prohibited transactions with disqualified persons. However, you have total control of your retirement investments, and are not limited to stocks and mutual funds. Investing with a SDIRA might trigger an Unrelated Business Income Tax (UBIT). Investments made through a Solo 401K are not subject to UBIT. Schedule a call with us if you have specific questions or need help setting it up.

Investors will receive a monthly or quarterly report that provides property updates, updates to the business plan, details on net operating income and expenses.

Real estate syndications are backed by real assets that don’t fluctuate like the stock market. BlueDoor Equity focuses on commercial asset classes that have historically performed better during the recession. While there are risks with any investments, BlueDoor Equity mitigates those risks by performing an extensive due diligence. Before we partner with best-in-class operators, we look at their track record, years in business, and the management team. We review financial statements and evaluate if the underwriting is conservative. We review local market data, and focus on markets that have population and job growth and diversity of economy.

BlueDoor Equity investment opportunities are open to both sophisticated and accredited investors. To get started, join the BlueDoor Investor Club. Once we get to know you and your investing goals, we’ll start to share investment opportunities with you.