The Predictable Way to Passive Income: Data-Driven ATM Syndications

by | May 19, 2021 | Accredited Investor, Passive Income

The well-known struggle with money is that people aren’t saving enough. Whether it’s for a rainy day, a future endeavor, or retirement, the general public has vastly undersaved and overspent, with 25% of Americans having no retirement savings at all. 

And, if you’re among the nearly half of Americans who have less than $100,000 in retirement savings, you’re probably concerned about finding an investment strategy that projects high returns but is also stable. No matter how much you’ve saved, the funny thing is it’s likely you feel off track anyway. 

Furthermore, financial and investment education seems like this secret, underground club you hear whispers about but can’t figure out where to find it, much less join in. I’ve got good news, though, you’re in the right place!

In this article, you’ll learn what an ATM syndication is, why it’s a recession-resistant investment, and get an overview of the investing and returns process. 

Why ATM Syndications Might Be Your Ticket to A Successful Retirement

A real estate syndication is a group investment into a physical asset, be it an apartment complex, storage facility, mobile home park, or other commercial property. Potentially hundreds of investors pitch in $50,000 or more all at once to collectively buy and improve a piece of real estate, projecting to earn cash flow, appreciation, or both. 

But did you know that ATMs (Automatic Teller Machines) are real estate too? Maybe you never thought of it this way. Still, the stand-alone, cash-dispensing works of wonder at the convenience store, outside the sporting arena, or on the corner at a busy intersection are a potentially profitable piece of real estate in which you can invest, just as you would an apartment complex or other piece of real estate. Here’s why:

A Data-Driven Way To Invest Strategically

Every time someone uses an ATM, no matter where it’s located or what type of transaction is being made, data is collected. The time of day, the length and complication of the transaction, the transaction type, demographics of the user, how much cash is being pulled, the balances on accounts being removed from, whether they touch on any ads, and much, much more. 

So, ATM operators across the country can quickly identify high-traffic, high volume locations and trends in user activity, thus which ATM locations are most profitable. Furthermore, in recessions and volatile times, like 2008 or during the COVID pandemic, ATMs’ usage remained consistent, only experiencing a slight dip in activity and resuming the following month. 

With 45 million Americans using cash as their primary means of purchasing power, regardless of the onslaught of apps and credit card options, the use of cash is still the most frequently used method of payment. ATM syndications operators use behavioral and transaction data to invest in batches of profitable, high-traffic ATM locations, improve the bank-in-a-box business model, and increase availability and accessibility to those who use it most while simultaneously providing reliable returns in exchange for investors’ contribution toward new, upgraded machines. 

Improving Accessibility and Preserving a Lifeline for the Underbanked

About 25% of American households are underbanked or unbanked, meaning they may not have bank accounts at all, distrust the banking system, lack access to credit or have poor credit, or use government-issued EBT or pre-paid debit cards as their primary means of income. 

This same demographic typically doesn’t have access to smartphones, and even if they did, the popular cash-transfer apps require a bank account or credit card to send and receive money. To them, the ATM is the bank and provides them access to the cash from their EBT or pre-paid cards so they can purchase essentials and support their daily routine. 

In time, we’ve seen that no matter the various spending or banking options available, people value having a choice with how they pay, and they prefer to pay with cash. Of the people who use ATMs, 40% of them visit an ATM 8-10 times a month, withdrawing an average of $40 each time. Their behavior hasn’t changed in decades, regardless of new technologies or banking opportunities presented to them. 

For this reason, cash is essential and irreplaceable, rendering ATMs an absolute necessity to ⅓ of the US population. This segment of society relies on cash, and the bank-in-a-box provides a safe, reliable, resilient way to obtain cash when they need it most. Ignoring ATMs as a necessary means of life for specific demographics would only widen gaps and deepen poverty. 

Advanced Technology, Convenience, and Improved Functionality

With the data collected on consumer behavior, demographics, and transaction details, ATM operators can quickly determine where and what other technology would help users. End-users at high-traffic locations can benefit from updated signage, greater functionality, and ease-of-accessibility improvements. 

Access to these important data points is a key factor in reducing investment risks.  The business model has been proven in a strategic location, and ATM operators are simply replacing the old machine with an updated machine.

Updated LED touch screens, the option to buy gift cards, attractive (branded) signage, and scrolling weather reports are just a few ways more options and information can be more easily conveyed to consumers. By leaning into trends that ATM users already exhibit, operators can replace old, inefficient machines with new ones that not only dispense cash, but provide gift cards to most frequented stores, use facial recognition and voice technology, and suggest smart money moves for consumers. 

Improving accessibility, increasing convenience, and providing efficiency to ATM users connects them to services and resources we never thought possible 50 years ago. Nowadays, upgraded ATMs can:

  • Issue stamps, passbooks, and tickets to events
  • Transfer money around the world
  • Grant loans
  • Accept payments
  • Conduct deposits
  • Open accounts
  • Convert currency
  • Connect an account holder with live, personal assistance 24/7

While you and I might be very comfortable with our laptops, cell phones, and Venmo, it’s essential to realize that there are entire groups of people who need reliable access to currency and resources, too and that ATMs are the answer for them. By investing in the improvement of ATM technology and locations across the US, we’re improving living conditions, ease of life, and providing more convenience for those who need it most. 

How An ATM Syndication Deal Works

Like other types of real estate syndication opportunities, investors examine the business plan, sign the PPM, and wire in their investment capital. Once you’re invested, you can expect (not guaranteed but projected) reliable monthly cash flow for the duration of the syndication deal. 

During this time, the ATM operators replace old machines with newer ones exhibiting improved technology, convenience, and accessibility. Since most stand-alone ATMs are placed at essential businesses, profits based on traffic and transaction values are recession-resistant. 

You get to sit back and relax while your investment capital works hard for you, earning high returns for the duration of the hold period, potentially skyrocketing your retirement account balance in just a few years. 

For more specific details on ATM syndications’ (and other real estate opportunities’) expected returns, business plan, and qualifications, come hang out inside the BlueDoor Equity Investors’ Club and schedule a call. I’m here to answer all your syndication questions and help you find real estate syndication deals that support your personal, financial, and retirement goals. 

ATM syndication deals are a great way to lock in passive, contractual cash distributions and build your retirement account balance rather than risking it all in the stock market. And, since more and more banks are closing underutilized bank branches and switching their resources toward ATM users, you can feel confident about your data-driven choice to generate passive income. 

Want to Learn More?

Ready to learn more about passive investing? Join our community and sign up for the BlueDoor Investor Club. Next, schedule a call so we can learn more about you and your investing goals. We’ll stay in touch with you through a series of newsletters, blogs, and educational content. Our members will be notified first when a syndication deal passes our stringent guidelines and becomes available.