Put simply, syndication is a pooling of investors’ capital to take advantage of the economies of scale and purchase a larger asset, such as a large apartment building. As a limited partner passive investor, your money is invested alongside dozens of other investors in a single commercial asset (such as an apartment building).  

As a passive investor, you won’t have any other active responsibilities in the deal.  The Elemental Equity team will manage the asset on your behalf.

A preferred return – often called “pref” – is the claim on profits given to preferred investors in a project.  The preferred investors will be the first to receive returns up to a certain percentage, generally between 6% to 8%.  Once this profit percentage is achieved, the excess profits are split among the rest of the investors as agreed upon in negotiations.  This type of return is most commonly used in real estate investments.

Multifamily is another term for apartments.  There are smaller multifamily properties, duplexes and four-plexes, and larger, commercial multifamily which consists of anything from 5 units and above.

When a property is purchased, not only does it include a building structure, but it also includes all of its interior and exterior components. On average, 20% to 40% of those components fall into tax categories that can be written off much quicker than the building structure.  A Cost Segregation study dissects the construction cost or purchase price of the property that would otherwise be depreciated over 27 ½ or 39 years.  The primary goal of Cost Segregation study is to identify all property-related costs that can be depreciated over 5, 7 and 15 years.  For example, certain electrical outlets that are dedicated to equipment such as appliances or computers should be depreciated over 5 years. Please consult with your tax professional.

Bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as machinery, rather than write them off over the “useful life” of that asset.  Bonus depreciation is also known as the additional first-year depreciation deduction.  This is an excellent, legal way of writing off your cash flow distributions.  Please consult with your CPA.

To be an accredited investor, you must EITHER have a net worth of $1M+ (not counting your primary home) OR have an annual income of $200K+ as an individual ($300K+ for joint income) over the last 2 years, with the expectation of the same income in the current year.

A classification of investor indicating someone who has sufficient income ($100K+), capital (liquidity to invest), experience, education within the investment class, and net worth ($350K+) to engage in more advanced types of investment opportunities.

No, you don’t need to be an accredited investor to register with the Elemental Investor Club.  However, certain deals will be open to accredited investors only.

The average hold time for our investments is 5-7 years.

We recommend that you consult with your CPA to obtain the most accurate tax information for your unique situation.

As a real estate syndication investor, you’ll gain the tax benefits of property ownership, including accelerated depreciation and cost segregation, which can help lower the taxable passive income you receive.

Each year, you’ll receive a Schedule K-1 tax form to include with your tax filings.  This form reports your income and losses for the investment.

If you happen to be a real estate professional, you may be able to apply these paper losses to your ordinary income as well.  Again, please consult with your CPA for detailed related to your specific financial situation.

Getting started is easy!  Begin by signing up with the Elemental Investor Club.  We’ll reach out to get to know you better and discover your investing goals.  Then, when we find an investment opportunity that matches your objectives, we’ll share the details with you!  And remember:  signing up with the Elemental Investor Club is free and there are no commitments to invest.