Brand new to “real estate syndications”?
We have you covered.
While a real estate syndication may sound technical, in practice it’s quite simple.
This page will give you everything you need to know about how we structure our deals, how investments work, and how you can start building passive income through multifamily real estate.
What is a real estate syndication?
At a high level, a real estate syndication is where a group of individuals or companies pool their money together to purchase a property and benefit from the rental income and potential appreciation that the property provides.
Real estate syndications are comprised of two groups:
- The syndicator(s)
- Passive investors
Colony Hills Capital is the syndicator. We find, structure, underwrite, finance, and raise capital for the deal. We spearhead the transaction and perform the critical tasks to make a deal for the property and ensure the investors receive their pro rata share of available funds.
Passive investors (like you) help by providing the capital needed to purchase the property and in return, they receive equity in the property. Typically, these investments can range from a minimum of $35,000 – $100,000 and up to several million dollars.
As an investor in the syndication, you’ll get many benefits:
- Passive income from the property
- Appreciation of the property once it is sold
- Tax benefits that come with investing in real estate
How a Real Estate Syndication Works
As the sponsor of the deal, Colony Hills Capital finds investment opportunities and arranges the purchase and management of the property.
We specialize in value-add multifamily property, which represents the highest-demand sector of rental properties. While there are no guarantees, these properties are considered “recession-proof” due to their price points and ability to weather financial storms while performing well in financial boom times.
By seeking out properties that are underperforming or undermanaged, we stand a better chance of appreciating the property and generating a return on the sale through targeted improvements and active management.
The best part is, as a passive investor you don’t have to do anything other than participate in the capital raise to purchase the property. This makes real estate syndications an extremely attractive investment as they provide the benefits of owning a property (tax benefits, passive income, appreciation) without the headaches that come with managing the property and tenants.
Real estate syndications are structured around a set timeframe for holding the property. These agreements can range from 3 to 5 years, after which the property is sold, benefiting the investors, who share in the profit in addition to receiving income during ownership, when available.
Who can invest?
Due to the nature of a real estate syndication as an investment that is not as strictly regulated by the SEC such as stocks or bonds, only accredited investors are able to invest.
An accredited investor is a person (or entity) who can invest in private securities that are not regulated by the Security and Exchange Commission (SEC). As an accredited investor, you can participate in private investment opportunities, such as private placements and venture capital deals, that are typically unavailable to the general public.
Not just anyone can qualify as an accredited investor. There are a set of requirements that you need to meet. These requirements are broken out into a series of categories:
- Income: You need to have an annual income of at least $200,000, or $300,000 if combined with a spouse’s income. This needs to be sustained from year to year.
- Skills: If you work in investments professionally (as an advisor or broker-dealer for example) or hold a valid Series 7, 65, or 82 license you can qualify as an accredited investor.
- Net Worth. If you have a net worth of $1 million or more (individually or with a spouse) not including the value of a primary residence.
If you meet any one of these criteria, then you qualify!