What is real estate syndication?
Real estate syndication, similar to real estate crowdfunding, involves consolidating capital from multiple investors, enabling access to high-value real estate opportunities at a lower minimum investment threshold. This opens doors for average investors to participate in deals typically reserved for the most affluent.
Differing from many real estate crowdfunding models, real estate syndication provides tangible ownership in the underlying real estate. YKS Capital establishes and oversees separate limited liability companies ("LLCs") for each real estate investment opportunity. In these LLCs, investors act as joint members and proprietors, thereby holding indirect economic stakes in the actual property asset. Through YKS Capital, investors become indirect proprietors of specific real estate property they choose to invest in, not just contributors in a fund.
We offer access to commercial real estate opportunities that were traditionally accessible only to the extremely affluent. We dedicate our time to sourcing high-quality real estate investments, eliminating the need for you to do so. Our primary goal is to enable investors to partake in the advantages of commercial real estate investment with smaller investment amounts. Instead of individually purchasing a multimillion-dollar building, you can invest in a collection of multi-million-dollar properties through a syndication.
We invest in established, income-generating value-added multifamily real estate properties. Investors are eligible to receive a portion of the rental income as well as a share of the profits upon the property's eventual sale. On average, the investment duration spans from 3 to 7 years. These investments are occasionally termed syndications, as our company pools some of the investment from other investors.
Certainly. In the case of rental properties, the entire depreciation expense of the property will be allocated to investors according to their individual ownership percentages.
Much like a 1099, a K-1 form provides a record of the annual taxable income. Investors obtain one K-1 per investment. K-1 forms are primarily employed in partnerships and real estate ownership. It's typical for a K-1 to display a "paper loss" even if cashflow distributions were received. These paper losses offer a means for investors to decrease their taxable income. Consult with your CPA regarding the potential benefits of using K-1 losses from Real Estate Investments to lower your taxable income.
Every property is maintained within a secure LLC ownership framework. The structure of the limited liability company is specifically crafted to segregate the assets and liabilities linked to the property from the personal assets of the investors involved.
At the conclusion of every relevant tax year, investors will receive a Schedule K-1 detailing their portion of taxable income or loss derived from each finished property. It will be the investors' responsibility to report this income or loss on their tax filings.
Certainly. Investors have the option to invest via an LLC or trust. They can also choose to invest using their conventional self-directed IRAs.
As an investor, you can expect returns on your investment through fund distributions facilitated by the company. These distributions commonly happen in two scenarios: 1) investors receive their share of profits through quarterly cash flow, or 2) when the property is sold or goes through the process of refinancing.
The standard minimum investment is set at $50,000; nevertheless, we retain the flexibility to adjust this requirement on a project-specific basis. While there is no upper limit on investment amounts, we maintain the right to cap investments at levels that ensure efficient and effective deployment of funds.
We aim to achieve an internal rate of return (IRR) ranging from 12% to 17% throughout the investment's lifespan by realizing gains from ongoing cash flow and the increased value upon the sale or refinancing of properties.