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This is not another get rich quick scheme. This is a get rich for sure play. Something that is possible through real estate syndications. Consider for example that you are only going to invest $50,000 in a syndication and will never add more capital to it. You are simply going to keep rolling the returns back into the next one. What would that look like?
Well the average syndication cycle is about 2-5 years. So let’s use the worst case scenario and keep the math at 5 years per syndication. Most syndications will deliver a 2X Equity Multiple return within that time frame, meaning if you invest $50,000 at the end of 5 years you can expect to have your $50,000 back plus have received another $50,000 from the cashflow during the hold period and the profit of the sale of the property. So now your original $50,000 turned into $100,000.
If you take the $100,000 and invest it again in another syndication after another 5 years you will 2X your money again, resulting in $200,000.
Let’s say you take your $100,000 and do it again and after another 5 years you now have $400,000.
Then you do it again. You invest $400,000 and now you have $800,000 after 5 years.
And now for the one last time you take your $800,000 and invest it again in another syndication. After another 5 years you will have $1,600,000.
So to recap – it took you re-investing your original $50,000 plus the profits 5 times in order for $50,000 to turn into $1,600,000. Considering a 5 year time frame per syndication, that’s 25 years.
I know that seems like a long timeline for many people especially if you are in a bracket age where waiting 25 years is just not doable. Although remember we only used $50,000 for the example, if you want to go cut the time down it is a matter of investing larger amounts.
There are some variables that you can focus on if you are in a higher bracket age such as looking for cash flow to replace your active income instead of heavily focusing on multiplying your capital. Look for my next article that talks about how to calculate cash flow to supplement your income.
I wrote an eBook that goes into detail about how to pick the correct syndication so that you make smart investing decisions – go to – www.BernhardtCapital.net