work less. live more.
Life gets busy…you may have money to invest and you are eager to grow your wealth, but it can be overwhelming with the initial learning curve. We’re here to help and answer your questions along the way! Even if you don’t invest alongside us, we’re here to be a resource and point you in the right direction!
Frequently Asked Questions
What is a syndication?
A syndication is essentially a “group investment.” Instead of sourcing a property and purchasing it on your own, a syndication gives you the opportunity to join other investors in buying a larger asset that you may not have found or had access to individually. Each member or Limited Partner (LP) of the property has a portion of ownership or shares in the deal; their returns are based off the amount they own.
Why not purchase a property on my own?
This may be the best strategy if you’re looking for active management and want to be involved in the day-to-day responsibilities of being a landlord. Our investors like the passive approach and being able to take an advantage of a majority of the benefits (cash flow, diversification, appreciation, potential tax benefits, passive investing) without the hassles of being a landlord. The Taylors have experienced both active and passive real estate; their passionate about giving others access to real estate that may not be ready to quit their day jobs.
What types of assets do you invest in?
We have invested in multifamily, mobile home parks, self-storage, light industrial, and recently assisted living. We also lend money to businesses and real estate professionals. While the asset class is extremely important, we’re very focused on finding best-in-class operators on the ground that know their markets very well and have a solid track record. We partner with them and together we’re able to purchase the properties along with co-manage them.
How long is my investment tied up?
It depends on the deal. Some are 1-3 years, other 5 or 10 years, though we may do longer holds in the future depending on the interest rates and economic conditions. During our initial call, we’ll explore the timeline you’re looking for and find a solution that works best for you.
What do your returns look like?
Each deal is different but we like value-add properties that are cash-flowing. However, returns may be lower early on with a property that needs to be stabilized. Importantly, we always present our returns as net meaning after all the fees are taken out.
Will you refinance a property and return capital?
That is a possibility depending on the property, interest rates, economic conditions, etc. Ultimately our goal is to sell the property at a significant gain and provide excellent returns to our investors.
Can I 1031 into one of your deals?
1031 is a specific part of the tax code that allows investors to defer taxes. We are not always able to accommodate people that sell their properties and want to use those funds to get into one of our deals, however, feel free to reach out to us. Depending on the deal, we may be able to find a solution.
Can I do 1031 out of your deal?
We may offer this option in the future when exiting deals so our investors can defer taxes on their profits. In this scenario, we would provide investors the opportunity to do 1031 into our next offering. If investors wanted to exit, we would either buy them out or backfill their spot with another investor. If you decided to stay in, we would move your capital to the next property we purchased and this would delay the capital gain tax implications.
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Will we get regular updates on the property?
Yes, we send out quarterly updates on each property via email. Please reach out to our team for additional questions. We are available and happy to help!
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When do K-1s come out?
We are dependent on our operating partners to get us the K-1s and we can turn them around in 1-2 weeks. We’ve had all of them come out before the tax deadline in the past, but cannot guarantee that. Most people who invest in syndications assume they will have to get extensions.
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Are you finding and purchasing all these properties by yourselves?
No, we partner with best-in-class operators that are on the ground and know their markets EXTREMELY well. They have a proven track record and we have fully vetted them before partnering together on a deal. They manage day-to-day operations and we’re in regular contact with how the property is performing.
What is your strategy for investing?
We are focused on finding high-quality real estate assets across the US. We have developed partnerships with tenured groups that will bring off-market deals to Taylored Investments and together we are able to purchase/manage the property.
Do you have a fund or do you invest in singular properties?
We do both. Our main focus is providing a tailored investment that meets the needs of each investor and their individual need (we want to get to know you).
What kind of debt do you get?
Rising interest rates have been a huge source of concern the last few years and caused many properties to underperform. At this time, our focus is on fixed debt though that could change in the future as adjustable rate mortgages provide more flexibility for selling at the opportune time (we always purchase rate caps in these situations though).
Will there be capital calls?
A capital call is when a project needs more money to run and the sponsor would request that from the investor. We have never done a capital call. We are adequately prepared and plan a significant buffer so that we hope to never have one. We mitigate this risk by focusing on deals that have cash flow from day one, so not only are we able to cover all of our expenses, but we also will have money to send out to our investors. That way, if something goes wrong, we can tap into that reserve rather than approach our investors to add more money.
Will there be cash flow?
Each deal is different with regards to the cash flow. It typically ranges from 5-7% in year one, then increases after that. You will generally see profits on the backend at the sale of the property once we have executed our value-add business plan.
Can we visit the property?
Yes, but please give us a heads-up so we can schedule the visit with the onsite team as their schedules are often different day-to-day.
Will I have to get a tax filing extension?
This is a possibility as there are multiple parties involved in the K1 process. We recommend talking with your accountant about the possibility of needing an extension just in case.
What taxes will I eventually have to pay on my returns?
Depending on your tax bracket, you will likely have to pay capital gains on the increase in value of your shares in the property and depreciation recapture. Depreciation recapture pays back the losses that you were able to tax advantage of in the prior years before the sale of the property. Always consult your CPA as we are not accountants.
What is the benefit of investing through a Trust or LLC instead of individually?
We create a LLC for every property, so you do not need to have your own LLC to invest in one of our deals for asset protection from the property. You may consider if there is a liability from you to the deal (for example someone sues you and wants your assets). On paper, syndications do not have much value so are not going to be a great target for litigators. A trust can be used to invest in estate planning. We are not attorneys, so please always consult your attorney or CPA.
Have more questions?
Contact us here.
434 509 7972
info@tayloredinvestments.co
