The process of investing is very fun. It starts out of necessity, then slowly transforms into a pleasurable addiction. It's thrilling to watch investment funds compound over time and receive "mailbox money" while doing what you love. Investing is not a "get rich quick" game but a"get rich for sure" game. Once someone makes the leap into real estate investing, they'll understand why it's the ultimate investment vehicle.
Although it's fun, let's remember the overall goal of investing: Be financially free. Being financially free means having enough income to retire, work less, or not work at all so you have the time to do what you want.
Below are oversimplified versions of a few different real estate syndication investment scenarios. This is assuming all investments are on a 5-year timeline. It needs to be abundantly clear these are oversimplified. These tables do not account for invaluable benefits such as tax savings, principal paydown, refinances, or compounding simultaneous investments.
The tables are designed to give an idea of how a single investment in a real estate syndication can compound over time when reinvesting the proceeds.
***This is being shared for illustration purposes only. This is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or fund interest or any financial instrument and is not to be considered investment advice.***
Investing $25,000 Once at a 2.0x Equity Multiple and 8% Cash on Cash (16.5% IRR)
Investing $50,000 Once at a 2.0x Equity Multiple and 8% Cash on Cash (16.5% IRR)
Investing $100,000 Once at a 2.0x Equity Multiple and 8% Cash on Cash (16.5% IRR)
Investing $50,000 per year at an overall IRR of 20% with cash on cash returns of 7%, 10%, 15%, 15%, and 15% over the five-year hold. It is assuming a refinance in year 3 with 35% of capital returned.
The table above is an example of the reality of these investments and how they can compound with continuous investment and reinvestment. Although it does take a significant amount of capital to begin we believe the benefits far outweigh the cost.
Above are a few models of how an investment can compound over time with different factors adjusted such as investment amount, investment frequency, and reinvestment to reach $1,000,000 in equity and substantial cash flow.
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