There are many ways you can build wealth through investments. Franchising is one of those ways, but I LOVE talking to other smart, talented business professionals about other investment opportunities that can build wealth. Today, I welcome my new friend Chris Larsen of Next-Level Income to chat about the similarities and differences between Franchising and Real Estate Syndication.
Chris explains why he calls multi-family real estate investing the “Holy Grail” of real estate. (And it’s surprisingly similar to franchising!):
“I call it the Holy Grail because I bought my first property at 21. I had all these single family rentals. I managed them essentially myself. I had property managers. But if you’re listening and you’ve had a rental, you know that they don’t really manage themselves even if you have a property manager. It was fine. But then I realized over the course of over a decade that managing these wasn’t the best use of my time. What I found was it wasn’t the best use of my money either. I had all this equity built up and I was getting like a single digit return and then I was paying taxes. So the reason I call multi-family the “holy grail of real estate” is because it gives you the ability to scale it. It’s a lot easier to manage because you can actually have property managers that are on site that are actually truly professionally managing these properties. There’s less risk, because if you have one tenant and they move out, your vacancy is 100%. If you have three hundred tenants and one moves out, your vacancy 1/3 of a percent, right? They’re very stable investments. And we even saw that during the pandemic last year. In our portfolio, our core portfolio of high quality properties here in the Southeast, our collections were 98%. You look at the returns, you look at the ability to passively hold them and you look at the risk versus returns, I call it the “Holy Grail.” But all those reasons and a few more are why I call it the Holy Grail.”
Chris describes the tax benefits of real estate syndication:
“If you look at the top, Forbes 500, the richest people in the Forbes 500, something like 15% are from real estate. It’s no secret that if you create your own business, that is a phenomenal way to create wealth. We know about Elon Musk. We know about Jeff Bezos, Bill Gates, all these billionaires. But there’s also people like Sam Zell, people that have built their fortunes as billionaires in real estate. Then you hear about people like Donald Trump who didn’t pay any taxes. You hear about Jeff Bezos, who doesn’t pay any taxes. Why is that? Is that because they’re cheating? You know, what are they doing?
What business owners and real estate investors know is that the IRS has written rules. And these are rules that you can learn and then you can change your investing strategy and your business strategy based on these rules. And most people complain about the fact that they pay too much tax as a W2 employee and how Jeff Bezos or Warren Buffett or Donald Trump doesn’t pay enough tax. Well, is it their fault that they learned the rules and figured out what the IRS does? And what really bothers me is when those people say, “Hey, we should pay more tax.” Well, they can always take out their checkbook and they can write a check to the US Treasury and send it in. So I always ask people, “Oh, you think you should pay more taxes? Have you ever sent the check involuntarily to the US Treasury?” The answer is probably “No,” right?”
Chris’ role in real estate syndication is exactly what The Daly Coach does and helping people figure out the business options. I’m not a broker. I don’t have a license to sell a franchise. I’m like the eHarmony of franchising! YOU bring the criteria you’re looking for, I have the relationships with the franchisors. I present the opportunities and YOU pick for yourself the right investment. Do you want to learn more about Next Level Income and real estate syndication? You can find Chris and get a free copy of his book Next-Level Income at https://www.nextlevelincome.com/book.
If you’re ready to explore your future in franchise ownership, please contact me directly using the form below!