If you make good money, and you want to make it work for you, passive investing in multifamily syndications may be a perfect fit. But what are the benefits of apartment investing compared to the stock market? How do you choose an operator you can trust? What happens if there’s an economic downturn? Can you really achieve financial freedom with passive investing?

Ryan McKenna is the founder of McKenna Capital, a private equity firm that helps investors build long-term wealth through value-add multifamily, self-storage and manufactured home park investments. Ryan has invested in 30-plus real estate and business syndications worth more than $600M, and his current portfolio includes 7,800 units in markets across the country. Ryan’s role at McKenna Capital involves overseeing acquisitions, capital raising efforts, investor relations and asset management.

Today, Ryan joins me to explain why he chose the path of passive investing and discuss what drew him to multifamily over other investment options. He shares the generous tax benefits of multifamily syndications, offering a high-level overview of how to leverage the cost segregation analysis to accelerate depreciation. Listen in for Ryan’s insight on how to vet an operator and learn how to put your money in motion and achieve financial freedom as a passive investor!

Key Takeaways

How Ryan got started in real estate

  • Learned about multifamily syndications in college
  • Used Rich Dad… as blueprint for financial freedom

Why Ryan chose passive over active investing

  • Enjoyed work in corporate world
  • Found good operating partners with track record

Why Ryan chose multifamily over other investment options

  • 16-20% annual return, 8-9% cash-on-cash return
  • Generous tax benefits, predictable in downturn

The beauty of the multifamily cash out refinance

  • Get back 100% of money plus cashflow
  • Redeploy in another deal for additional income

A high-level overview of the cost segregation study

  • Accelerates depreciation on parts of property
  • Big tax advantages up front (huge taxable loss)

Ryan’s advice for aspiring passive investors

  • Reach out to people already doing it, ask Q’s
  • Diversify in multiple markets, operating partners

How Ryan vets a multifamily operator

  • Look for character, integrity and trust
  • Communication style + transparency
  • Track record (execute on business plan)

Ryan’s insight on waiting until after a downturn

  • Money in bank losing value with inflation
  • ‘Bad deal’ still returns 8 to 12% + tax benefits

Ryan’s timeline to financial freedom for passive investors

  • Invest $100K per year for 5 years
  • Passive income stream of $140K

How Ryan’s life has changed now that he’s financially free

  • More time with family, lifestyle by design
  • Passionate about real estate (full-time syndications)

Ryan’s transition from passive to active investing

  • Co-syndicating deals as part of general partnership
  • Raise capital, introduce investors into multifamily

Connect with Ryan

McKenna Capital

Resources

Deferred Sales Trust on ABI EP166

What’s the Best Investment: The Stock Market or Real Estate?

Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not by Robert T. Kiyosaki

Nighthawk Equity

Financial Freedom with Real Estate Investing: The Blueprint to Quitting Your Job with Real Estate—Even Without Experience or Cash by Michael Blank

Podcast Show Notes

Review the Podcast on iTunes

Michael’s Website

Michael on Facebook

Michael on Instagram

Apartment Investor Network Facebook Group

The Secret To Raising Money To Buy Your First Apartment Building

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