Frequently Asked Questions
Why invest in Syndication?
You’re busy with your career and family, and syndications allow you to participate in the benefits of direct real estate ownership without the hassles of day-to-day management. You can diversify your portfolio outside of the volatile financial markets while maintaining a passive role. Your investment will be managed by a professional management team with a previous track record of success, you will benefit from economies of scale, and risk will be spread across multiple units.
What is Syndication?
Syndication is simply a pooling of investors money, where the investor is a limited partner (LP). As a passive investor, you invest your money and receive returns while the general partners manage the deal, business plan and professionally manage the day-to-day operations of the property to provide a return for the benefit of all investors.
SparkPath Investments is your partner, we help by vetting and identifying apartment and self-storage syndications in growing regions for the long term, through our key partnerships. We personally invest in all the syndications we recommend.
Why multi-family/apartment syndications?
With multi-family, you earn passive and stable monthly cash flow through the acquisition of well positioned, stabilized properties. Earn returns while you enjoy the things you love to do.
Multi-family investments have lower vacancy risk than other property types and historically has been the strongest performing real estate asset class.
The value of the investment increases through property improvements and professional property management. Rents are increased and expenses reduced, thereby increasing the property’s net operating income.
You can further reduce your earned income tax through the property’s depreciation schedule.
With tenants paying down the principal on the loan, your equity in the property increases which is paid out when the property is sold.
Multi-family tends to be protected during a recession as people downsize to apartment living. Compared to single family homes, your vacancy risk is spread as you have multiple renters paying down the mortgage.
The investment is backed by a hard asset and is not going away.
increasing demand for apartment living and rentals.
*76 million millennials have less desire to own a home due to large student debts, making
it difficult to purchase a home.
*74 million baby boomers are downsizing and studying for the convenience of renting.
*single population rose by 15 million above married couples over the past 10 years, due
to singles delaying marriage and a higher divorce rate.
*Reduced inventory of rental households. We will need 500,000 new rental households
per year through to 2025, but have only built 300,000 units in the last 3 years.
Syndication deals provide the opportunity to pool your capital with others into high-value assets with potentially high returns while reducing your overall risk.
What is an accredited investor and do I need to be one?
An accredited investor, as defined by the Securities and Exchange Commissions (SEC) is someone who must satisfy at least one of these requirements. It is to ensure proper protections for all investors.
1. Have an annual income of $200,000, or $300,000 for joint income, for each of the last two years, with expectations of earning the same or higher income this year.
2. Have a net worth exceeding $1 million, not counting your primary home.
While most of our investments are available to accredited investors only, we do offer a few investments for non-accredited/sophisticated investors.
What is the minimum investment?
The typical minimum is $50,000 but the minimum investment can vary. Some people invest with a self- directed IRA or a solo 401k plan.