On the show today we talk… Diversify Your Portfolio With Real Estate Syndication: The Details!!
– Checkout Ryan’s website at: https://spartan-investors.com/learn/
Show notes for Diversify Your Portfolio With Real Estate Syndication: The Details!!
The Vantastic Life is…
– is in Durango CO!
Julie is looking at gray skies that aren’t smoke with a little bit of rain on a Wednesday (we think).
Joe is in Durango CO and Ryan Gibson’s office is in Golden CO!
If you want to live the life on the road you should invest in syndications.
This summer Ryan hiked the Enchantments to raise money, and it was the coolest hike he’s every done. They started walking at 3:30am and got done at 6pm. This hike is outside of Leavenworth, WA.
The hike was amazing and we went swimming in the glacial lakes. It was amazing!
We could talk about all of this stuff for hours, but we want to get into discussing our talk on real estate syndications. Real estate syndications are ways for people to partner on real estate deals together, and buy larger deals.
You don’t have to have a ton of money to buy really large real estate buildings. You can directly own a commercial piece of real estate with a minimal investment of $25-50k. It’s possible.
You can do this on your own, but a really great way to dip your toe in that water without taking all that risk is to invest in a syndication and see how they communicate and invest. This will teach you how to do it on your own. It’s like riding along with a more experienced investor.
The first time I did a syndication I was investing in someone else’s storage units deal. If you are thinking about doing a bigger deal. Find a good operator and see how they do things.
I’m an investor in your deals, and I see some of the biggest names out there investing in deals with you. So it’s cool to see this big investors doing deals like this. Tarl and Grace and Jennifer Beadles we all talk about this stuff.
This is something that I’ve never talked about with you.
Today is meant to introduce and enhance your knowledge of real estate syndications, and talk with top notch syndicators.
When you invest in syndications you’re a hands off partner. I’m an investor and traditional real estate broker. I’ve been in real estate for 20+ years. This gives you a way to invest in an asset class that’s not connected to the stock market. It’s a way to grow your wealth in these crazy times.
Ryan is a constant and continuous educator on these topics. You can learn all kinds of information on this topic at Spartan-Investors.com.
Can you tell us your story, Ryan?
I was an airline pilot for AlaskaAirlines. I was pilot housing for pilots that had to commute into their jobs. When I lived in DC I flipped my first house. And I met my partner at Spartan (Scott) as my neighbor, and we flipped 4 houses on that street together.
Then we looked to see what the most stable asset class was. It was self storage, and now we have over 5700 units, with 30 full time employees.
And we just opened a Bellevue office. Where our headquarters is in Golden CO.
We also have a few RV parks.
Scott has a military background
We made the INC 500 for fastest growing companies. We had 1450% growth. That was super exciting.
We’ve measured our growth from 2015-2020 and it’s over 4000% based on a revenue measurement. Which is shared and participated by with our investors.
Hopefully next year we’ll be in the top 100 operators.
And I attribute at lot of this to Scott and our strategic plan that you can see on our website without giving your email.
Our growth has been great, and manageable. I’ve lived a good life during this.
We have so many good people working with us! It’s the only thing that matters. We invest in our values.
And my #1 mission is to provide the absolute best vetted into possible. It’s kind of selfish actually. I’ve been able to meet amazing people like you. So, thank you!
Let’s say you’re looking to reposition your portfolio or funds…. What’s the difference in REIT and syndication?
REITs were started by president Eisenhower back in the 60’s. You can invest 100’s of dollars and own part of commercial real estate.
REITs are speculative and don’t have tax benefits.
When Corona virus came out there was a lot of speculation. The REITs took a big hit. But what happened with syndication… nothing. Our syndications held steady and actually increased a little bit.
When you invest in a syndication you’re investing in a hard asset.
With a REIT you’re buying into a whole business model, you don’t really know what you’re buying. It’s a generic thing.
The other thing is the tax implications. We get tax benefits from syndications. Our investors get thousands of dollars of losses on their taxes from the investments. You just don’t get this from REITs.
How about sharing a case study of a stabilized asset?
Sure. We have a bread and butter deal which is an existing self storage facility. We bought one in the middle of COVID in Denver. The owner was letting the place fall apart. He was a typical owner. And he just wasn’t collecting the rent.
Our team takes over and puts in a call center, a new manager, online 24/7 sales, we make it easy for people to pay and book. We make it easy! We have tenant insurance. We repaint the facility.
This facility is now 90% full and stabilized. It makes monthly distributions to our investors.
It doesn’t take that long for us to do this. We have a great team that takes over and does a great job!
Then our investors get a steady distribution.
Do you take debt on the property?
Investors get paid via… cash flow of 6-8%. They get liquidity events (when the property sells, or if the property gets refinanced).
We eventually sell or refinance our properties.
All good stuff!
Have you guys sold anything yet?
We have 9 completed project where 7 were syndications.
On storage we’ve had one that we rolled into a new fund and cashed out the investors.
I personally don’t want something to sell unless I’m going to 1031 trade up.
If you want to get a great return you need to have your money constantly invested.
Absolutely, cash sitting is declining.
I feel fully informed from you.
We do a communication on the 15th of every month. You get an email if you want to know what’s going on. We share what’s going on in all of our investments.
I love seeing that!
Yeah, we had that feedback from our investors.
We love transparency and being an open book.
We do a quick occupancy dashboard, and usually do a video for you.
The other thing is we share the financials every quarter. You can quickly tell if we are tracking the business plan or not. We are very data driven! We have 3 people that work in data.
Every 3rd quarter we invite everyone into a company wide conference call. We open it up to Q and A and everyone gets a chance to talk.
Lastly, the 4th way is the online investor dashboard where you can see investments and distributions. As well as investor statements.
So if you’re investing in syndications… this is your measuring stick.
What about the need for 1031 exchanges, which might be on the chopping block. I’ve always asked you about a need for a big 1031, what can you do?
You can 1031 exchange money into our syndications. If you sell a large real estate transactions they consider it like kind. It’s a little more involved in the paperwork and we have someone on our team that helps us with that stuff. We can do that!
That is such great news! I can’t tell you about how myself and my clients that are ready to be done as active investors. I would 1000 times rather invest with you than throw my money into a DST!
The DST’s are stable funds. The value that we create are going to be generally higher projections. There’s a difference. They are lower returns, their can’t be any development component to the deal.
We are also talking about diversification of your assets.
There’s a lot of misinformation out there. Definitely check with your attorney and tax advisor.
You can’t 1031 into an LLC, but you can 1031 onto the title. It’s very technical and we have a team that will walk you through it.
If you would like more information. Maybe you’re in syndication or thinking of investing in one… contact me and I’ll give you the top 5 questions you can have to vet your syndicator.
We actually have an investment syndication simplification meetup online.
Nothing is truly passive. And I encourage you to do a ton of research on your operator.
I fully understand the due diligence that’s required to be a high quality syndicator. When I had my twin girls I wanted to not do as many large hands on deals myself. I prefer to be passive and do what I love doing.
Just because someone tells you they are a syndicator does not mean you should invest with them. Do your due diligence!
Part of the reason I wanted to do this podcast is because people that I talk to on the brokerage side have money they need to invest.
I thank you for your time today Ryan! We could talk for 15 hours and never get bored!
You can reach me via phone or email, and highly encourage you to reach out to Ryan.
Got to Spartan-Investors.com.
What’s the minimum investment?
Typically $50k, and the average is about $200k. The maximum is $4m.
How do you get the opportunities?
We just send out an email and then schedule a call (if you want to…). We like to hear from you and what your objectives are.
So the best thing is to go to your website and get educated there and then sign up on your email list. Fantastic!
We also host a real estate meetup!
Every single Thursday PST we do an online meetup at 11:30am. Go to https://meetup.com/seattleinvestorsclub
Everyone is welcome!!!