- Higher Returns Than the Stock Market -- The average annual return of the S&P 500 stock index from 1957 - 2018 was 7.96%. Fees, taxes, and inflation reduced this to an actual return of around 2.5%. Multi-family real estate syndications regularly yield average annual returns between 12% - 18%. These returns are after fees, are taxed at a much lower rate, and act as a hedge against inflation.
- Tax Benefits -- The U.S. government encourages real estate investment by providing advantages in the tax code. There are many legal tools and tax advantages to make real estate investment income tax free or deferred.
- Passive Income -- Investing in a real estate syndication creates "mailbox" money for you. You passively collect your share of the profits without having to show up at the office, manage the property, or take those midnight broken toilet phone calls.
- Stability -- While real estate values are not guaranteed to always go up, they don't see the wild swings that occur frequently in the stock and bond market. By holding cash flowing properties, we can ride out any temporary downturns by sitting back, collecting our cash flow (rents), and wait for things to normalize.
- Value Add Opportunities -- We seek out investment opportunities that allow us to "add value" and force appreciation by actively managing the asset to increase income and/or reduce expenses which in turn increases the value of the property. Unless you are a very large stockholder, on the board of directors, or work for the company, there is very little you can do to add value to the stock of a large corporation.