syndication faq

WHAT IS A SYNDICATION?

A temporary alliance formed to achieve a common objective. In this instance, it is a group of investors pooling funds together to purchase real estate, like an apartment community, that would be difficult or impossible for any one individual to do on their own.

WHAT IS AN 'ACCREDITED INVESTOR', AND DO I NEED TO BE ONE?

You're considered an accredited investor if you meet 1 of the following 2 criteria: 1. have a net worth over $1,000,000 (with or without your spouse, not including the equity in your personal home) or 2. have an individual income of over $200,000 (or over $300,000 joint income) and expect to meet or exceed that income in the current year. And no, you do not need to be an accredited investor to partner with True Freedom Capital.

WHAT IS A SOPHISTICATED INVESTOR?

There are no strict guidelines here. The SEC defines a sohpiticated investor as "All non-accredited investors, either alone or with a purchaser representative, must be sophisticated—that is, they must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment." - https://www.sec.gov/fast-answers/answers-rule506htm.html

 
 
WHAT IS THE MINIMUM INVESTMENT?

Everyone's favorite answer, it depends. The minimum investment will vary by deal and the capital required to purchase the asset. We strive to make investments available to everyone and as affordable as possible. That said, we are limited on the number of sophisticated investors we can include. Typical investment amounts range from $25,000 to $100,000.

WHAT ARE THE RETURNS ON MY INVESTMENT?

Exact percentages will vary between investments. You will receive the same TYPES of returns across the board. Cash on cash returns are paid out periodically throughout the lifecycle of each investment. You will also receive a portion of the profits from any refinance that occurs and sale of the asset at the end of the project.

HOW LONG WILL MY MONEY BE TIED UP?

While the investment period is deal dependent, investors should plan to leave their money in an investment for a minimum of 5 years. There may be the option to sell your shares prior to the 5 year mark with prior approval of the general partners. While no promises can be made, we understand that life happens, situations and needs change and we will do our best to accomodate if the need arises.

I DON’T HAVE $25K IN CASH, BUT HAVE $800K IN MY 401K, CAN I USE THAT?

Check with your 401K provider, if you're able to move some of those funds to a Self-Directed IRA (SDIRA), Self-Directed 401K or eQRP, you'll be able to use it. We've patnered with Advanta IRA to make it easier for you to set up an SDIRA, though you are absolutely free to choose your own provider. Please click HERE to visit their site and they can walk you through getting your SDIRA set up. We do not receive any compensation by referring you to Advanta IRA, we only recommend them due to the ease of setup and quality of service. We've vetted over 10 companies to arrive at Advanta IRA and want to ensure you have the easiest experience possible.

WHY DOES THIS REAL ESTATE SYNDICATION THING SOUND TOO GOOD TO BE TRUE?

They are pretty sweet. That said, a syndication is an investment, so it carries risks, which will be disclosed as part of the offering through the private placement memorandum (PPM) that each investor will receive. Each investor's risk is limited to the amount of capital invested. There are risks that market conditions change or a force majeure event occurs. This is why it's very important to us to be conservative in underwriting each deal. Unforseen things can go wrong, but we will continue to communicate the status of the property, challeneges, wins and what we are doing to protect your capital, first and foremost, and also grow it to align to our project objectives. Transparency and communication are vitally important to us.

HOW DO I FIND OUT ABOUT THE OPPORTUNITIES?

You must be part of our investor network and have had an intro call with Chris or Joe. To get started, please sign up HERE.

WHAT IS A PREFERRED RETURN?

Sometimes referred to as a "pref," it describes the 100% claim on profits given to limited partner passive investors in a project. They are the first to receive returns up to a certain percentage, generally 0 to 8 percent annually. Once the returns reach this percentage, the excess profits are distributed among all investors as outlined in the operating agreement of the entity.

WHAT IS A CASH ON CASH RETURN?

Cash on cash return measures the amount of money you put in your pocket (before taxes) based on the amount you've invested. If you invest $100,000 cash and you receive $10,000 that year in distributions - you cash on cash return was 10%. This is a levered (after debt/mortgage) metric calculated by... (Annual Pre-Tax Cash Flow) / (Total Cash Invested) = Cash on Cash Return %.

WHAT IS AN EQUITY MULTIPLE?

The equity multiple is the ratio of cash received vs cash invested, over the life of the investment. An equity multiple of 2.0x or 2:1 means your are getting $2 for every $1 you invested. If you invest $100,000 and over the life of the investment you receive $175,000 total, your equity multiple was 1.75x.

WHAT IS A CAPITALIZATION (CAP) RATE?

To put it simply, a cap rate is the rate of return you would receive if you operated the property at the current financials and purchased using all cash (unlevered). Cap rate is typically correlated with risk, with Class A and new construction demanding lower cap rates, and Class D and distressed properties demanding higher cap rates. The calculation is Net Operating Income (NOI) divided by Sales Price.

TRUE FREEDOM CAPITAL FAQ

WHY DID YOU PICK THE NAME 'TRUE FREEDOM CAPITAL'?

True Freedom is when you are free to choose what is right, rather than feel compelled toward a choice because of societal norms or financial rewards. When you have True Freedom, you can choose what you know in your heart you are called to do. We believe you can have your greatest positive influence on the world when you have True Freedom.

WHAT IS YOUR EXPERIENCE & TRACK RECORD?

Chris has over 7 years of real estate investing experience managing residents, financial modeling and underwriting deals to go along with his 14 units of multifamily assets. Joe has led multi-million dollar businesses, and through applying that knowledge to real estate, has experienced tremendous success over the past year by accumulating 16 units. Beyond our experience, our work ethic stands alone. We work with coaches and mentors to continuously improve in this business. For any future deals, we are aligned with experienced operator partners, to further ensure successful projects. Please read more HERE.

WHAT TYPES OF REAL ESTATE DOES TRUE FREEDOM CAPITAL INVEST IN?

Our primary focus is on multifamily apartments. In short, we believe multifamily provides superior returns with less risk and more control than alternative investments or other real estate asset classes. The ability to defer taxes and leverage capital only makes multi-family more attractive. With multiple units under one roof, economies of scale and efficiencies are created. To learn more on why we prefer multifamily investing, click here to get our "Why Multifamily" presentation. We are also vetting mobile home parks and self-storage deals. Similar to multifamily apartments, we like them for their stability, high returns, and resistance to market fluctuations.

WHY SHOULD I INVEST WITH TRUE FREEDOM CAPITAL?

When you invest with us, you're not only lightening your own financial burdens and working toward your True Feedom, you are providing safe, clean homes for people to live and take pride in. Indirectly, you also help others find True Freedom as we continue to educate others on True financial literacy, something not taught in schools today. Your capital will work for you in a time-tested investment vehicle while you are directly impacting the betterment of a community.

CAN MY FINANCIAL ADVISOR TALK TO YOU GUYS?

Absolutley. Please be advised that most financial advisors won't recommend real estate investing for at least 1 of 2 reasons: They aren't permitted or licensed to do so, and/or they do not make commission off of it. Keep in mind, a common thing among the wealthy is that they own real estate. CLICK HERE for a podcast that explains why your financial advisor might not reccomend real estate.

HOW WILL TRUE FREEDOM CAPITAL PROTECT MY INVESTMENT?

We are always conservative in our projected returns and analysis. While many operators say this, we look for projects with a strong expected case, high chance to hit the upside case targets and low risk in the downside scenerio. Investing in properties that cash flow on Day 1 (before any value-add strategies are implemented), having adequate cash reserves and establishing long-term, low-interest debt is key. Following these guidlines will help a project weather unexpected events.

WHAT IS YOUR STRATEGY FOR ACHIEVING PROJECTED RETURNS?

We look to do this by adding value. Each deal will vary, however here some common value-add items we look for in a property: dated units, missing ammenities, properties with deffered maintennace, higher than average occupancy, owner-paid utilities, alternative revenue streams, under market rents, owner-managed or mis-managed.

Didn't find your question/answer? If not, please contact us.

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