Passive Income Strategy For 2021: Real Estate Syndication

Kim Daly Coach's Corner, Vlog

There are many types of investments, and franchising is only one of them! You already know that I LOVE to talk about investments, so I thought it would be fun to share some other passive investment opportunities for 2021. A great friend of mine who is an expert at real estate syndication, Stephanie Wankel of the Frenzied to Financial Freedom Podcast and a syndicator with New Heights Investment Group, is here to talk about passive income and real estate syndication!

Stephanie tells us a little more about herself:

“I am in the tech space from a career perspective in product development. I also have been a real estate investor for about thirteen years, and I started out by buying rental properties. I was newly divorced and a single parent with half my assets and income. The recession came in’08, and that’s when I decided to buy real estate as an investment. I bought some martial arts franchises. I then started buying residential properties, for which I still have a portfolio.

I jumped into real estate syndication to scale in the real estate investing world. Its number of doors helped not only generate wealth but reduce risk. For example, if I had one rental property and the tenants turnover, then I’m out of rent for how many months whereas if I have an apartment building with 200 doors and five people leave, then I don’t feel that pain. This is why going bigger in real estate is better.”

Stephanie dives further in to explain what real estate syndication is and its benefits:

“Real estate syndication is an operator or sponsor who knows a market, has relationships with brokers, and gets a good deal. As a syndicator, I partner with operators with a track record in a market, and I help bring them investors for the down payment on the apartment. How that helps the investors is they get great returns in the form of cash flow every month. So, if you’re an investor in one of these apartment buildings, where you invested one hundred thousand dollars, that investment would get eight percent cash on cash. That means you’re going to get upwards of a six hundred-dollar check in your account every month by doing nothing. You have no risk. You’re not getting phone calls with toilets or termites. You’re collecting checks. The operator is renovating units. And over a five to seven-year time frame, they’re bringing the value up in the asset, then sell it, and you will have doubled your money by then and get your investment back. That’s kind of the high-level example of how syndication works.

The other thing with franchising this idea of passive or more active, the same applies to real estate. There’s active investing, and there’s this continuum of passive and active. The most active investor is like a fix and flipper. They’re active in their business, doing work, turning it over, and you can go all the way up the chain to like syndication, which is truly passive. You aren’t doing any work on your investment.”

Stephanie talks about mitigating risk:

“Everything has a risk, right? The way to vet the risk of the deal is by working with great partners that you like, know, and trust and that have a track record and obviously people. You have to do some diligence, like with everything. You have to know the market and know that it’s a valuable market and make sure the fundamentals and the business case make sense. When I speak about risk, I mean that one thing that scares real estate investors is the fear of making a bad decision and losing all their money.”

Stephanie gives us the scoop on her podcast:

“My podcast is Frenzied to Financial Freedom Podcast. It started because, in this real estate syndication space, there are very few women. In syndication conferences, there would be about five percent women. So, it started by putting something out there as a platform for fellow real estate investors to showcase what they’re doing in this space and to inspire potential investors who want to invest in real estate that these amazing women investors. We branched out to talk to women entrepreneurs, talking about expanding from investing to for real estate to investing in businesses. Because if you’ve read the “Rich Dad, Poor Dad” series, there are four quadrants, one is an investor, and one is businesses. And the idea of both can generate active and passive income. And so, having multiple streams of income is kind of how you win at this building wealth game.”

For more information about real estate syndication, Stephanie invites you to e-mail her directly.

And as always, I invite you to reach out to me directly with questions or to explore your future in franchising!

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