MULTIFAMILY INVESTING EDUCATION
CURIOUS TO SEE HOW $100,000 INVESTED IN REAL ESTATE VS. THE STOCK MARKET PERFORMS OVER 15 YEARS...?
HOW INVESTORS MAKE MONEY
CASH FLOW
DISPOSITION
CASH FLOW
Income from the properties is distributed quarterly
APPRECIATION
DISPOSITION
APPRECIATION
Unlike single family homes, a multifamily apartment syndication is a business valued primarily by its Net Operating Income (NOI), not property comps. Through physical and operational improvements, you can increase the value of the property by increasing NOI.
AMORTIZATION
DISPOSITION
AMORTIZATION
Revenue from operations & rental income pays down the debt on the property, which in turns builds equity for investors
DEPRECIATION
DISPOSITION
DISPOSITION
Lump sum payouts at time of sale or refinance
DISPOSITION
DISPOSITION
DISPOSITION
Lump sum payouts at time of sale or refinance
TAX BENEFITS OF INVESTING IN REAL ESTATE
DEPRECIATION
COST SEGREGATION
DEPRECIATION RECAPTURE
BONUS DEPRECIATION
CAPITAL GAINS
ANNUAL TAX STATEMENTS
DISCLAIMER: THIS IS FOR YOUR INFORMATION ONLY. FOUR OAKS CAPITAL IS NOT A TAX ADVISORY FIRM, WE REFER ALL TAX-RELATED QUESTIONS BACK TO ACCOUNTANTS.
WE WILL REITERATE THAT INVESTORS OFTEN SEEK REAL ESTATE OPPORTUNITIES DUE TO THE TAX ADVANTAGES THAT MAY COME FROM DEBT WRITE OFF AND LOSS DUE TO DEPRECIATION.
FOUR OAKS CAPITAL DOES NOT INCLUDE ANY ASSUMPTIONS ABOUT THESE TAX ADVANTAGES IN OUR UNDERWRITING.
In addition to the capital preservation and cash flow benefits, one of the main reasons that passive investors seek to invest in real estate opportunities, and apartment syndications in particular, is because of the tax benefits of rental property.
When a passive investor invests in a value-add apartment syndication, they will typically receive a profit from annual cash flow and the profit at sale.
Being a profit, this money is taxable. However, for apartment syndications, there are five pieces of tax information that the investor need to understand in order to determine the tax advantages of investing:
1) the depreciation benefits
2) accelerated depreciation via cost segregation
3) depreciation recapture
4) bonus depreciation
5) capital gains tax at sale.
HOW IT ALL WORKS
INVESTMENT TYPE
Multifamily apartment complexes that are under valued or have been poorly managed creating a value-add opportunity
TARGET MARKETS
The Southeastern United States:
Affordability, Rapid Population & Infrastructure growth matched with landlord friendly regulations.
PROJECTED RETURNS
15%+ AAR
(Average Annualized Return)
HOLD PERIOD
Typically 3 - 7 Years
WE FOCUS ON VALUE-ADD REAL ESTATE
Four Oaks' strategy is to capitalize on favorable demographics and supply/demand in metro areas in the SOUTHEAST through the acquisition of Class B and C multifamily assets.
Our objective is to enhance the value of investments through extensive renovations, while maximizing returns to investors and providing residents with an improved quality of living.
We target assets with highly desirable locations in close proximity to large employment centers, major thoroughfares, public transportation access points, public schools, retail centers and grocery stores.
The end result is affordable, high quality properties, in desirable locations, that are acquired at a discount relative to market.
WHY CLASS B & C APARTMENT COMPLEXES
Class B and C properties have experienced an increased demand as rising rates have pushed renters towards more affordable options. And as the wage gap and income disparity across the country builds, aggregate demand for Class B and C properties is also expected to increase.
Need for these assets exists regardless of economic cycles. In tougher economic climates, Class A- and B+ renters may be forced to trade down to Class B/C multifamily. Newer/younger entrants to the renting pool also tend to look for value properties. B/C class fills needs in both robust and weak economic cycles.
No new “B” & “C” class properties are being built for working-class individuals. When new apartment complexes are built, they are inherently class “A” properties with a corresponding higher rent.
These complexes are typically older and offer the chance for value-add renovations that we require in order to increase cash flow potential.
INVESTING IN REAL ESTATE WITH A
SELF DIRECTED IRA
You can use your retirement funds to open a Self-Directed IRA (SDIRA) account with Rocket Dollar to invest with Four Oaks Capital. Rocket Dollar makes it quick and easy to signup online, backed by the simple and transparent price of $15 per month (regardless of the amount of assets or number of transactions) and a one-time set-up of $360. You can utilize the code FOUROAKS to take advantage of $100 off.
You will maintain all benefits of a typical retirement account, and if you are self-employed you may qualify for the Self-Directed Solo 401(k), which offers tax deferred contributions up to $56,000/year. For more information take a look at Rocket Dollar's Knowledge Base, schedule a call or signup online.
WHY WE USE ROCKET DOLLAR
-The fees are about ⅓ of your traditional Self-Directed IRA custodian
-The fees are pulled from your credit card as opposed from being pulled from your IRA account
-We at Four Oaks Capital appreciate intuitive design
-They offer our investors $100 off the set-up fee with code FOUROAKS
