You might be asking, is it really possible for a passive investor in multifamily real estate to become financially free? The short answer is YES, but the amount of time and money it takes is different for every investor.
Today, I’m going to help you answer this question for yourself.
You’ll meet people that are living the dream and you'll learn from their experiences. I’m also going to go over some assumptions about the returns you can expect from your multifamily investments. And finally, you’ll leave with a free calculator to help you create your own roadmap to financial freedom.
Ready? Let’s DO THIS!
Real-Life Examples
Quitting your job and achieving financial freedom through passive investing is a real possibility.
I’ve interviewed several people that have done just that. They have literally quit their jobs and retired from being a doctor, dentist, and an attorney through passive investing alone.
Check out the interviews for yourself on my Podcast. Their lessons are invaluable!
- Episode 174: Put your Money In Motion with Passive Investing with Ryan McKenna
- Episode 181: Double Your Money Through Passive Investing with Jan Larson
- Episode 186: The Predictability of Passive Investing with Spencer Hilligoss
Early retirement through passive investing isn’t just a thing, it’s a real strategy. And a lot of these people have quit their jobs in three to five years simply by reinvesting. I'm not talking about hundreds of thousand dollars a year, I’m talking a $50,000 re-up in their investment whenever they can, over time.
These multifamily syndications are so powerful because they can produce amazing cash-flow and wealth in such a short period of time. The question is – why aren’t more people aware of multifamily investment as an option? If you think about who’s producing most of the financial education, the large financial institutions, then you have your answer.
Large financial institutions are incentivized to educate people to invest in Wall Street. My motivation, and our mission at NightHawk Equity, is to show people how to become financially free through this amazing investment vehicle – multifamily syndications.
If you haven’t already, download the special report I have put together for you that compares the investing in Wall Street versus Multifamily Real Estate.
Special Report: What’s the best investment? The Stock Market or Real Estate?
Projecting Wealth
In the video, you can see a spreadsheet that I use to make calculations about projecting wealth through passive investing. Check that out to follow along.
Here are the assumptions I use:
- Investing $50,000 a year
- Average cash-on-cash of 7%
- Projects are refinanced after 2 years
- Return is 50% of the original capital = $25,000
Let's further assume that you're selling these projects after 5 years, which is typical for a syndication. When the project sells, it’s likely to net you an 8% average annual return. The proceeds, combined with the $25,000 made during the refinance, means that you’re now looking at an annual average return of roughly 15%.
This is the criteria for almost all of our projects, and these assumptions are actually fairly regular.
As a passive investor, you’re going to be very happy with these returns. Naturally, you may consider reinvesting these proceeds to keep the streak going and continue the momentum. By doing that, you can create a mini cash flow projection.
The thing to notice is your cash-on-cash return starts at 7%, and continues like that in Year 2. But then, it starts to go up a little bit. That’s because in Year 3, you're starting to refinance and have done your first project.
Then in Year 4, you’ve refinanced a second project. You’re getting the proceeds from the refinance and your return jumps even higher in Year 5, because that's the year you actually sell your first project.
Now, look and see what happens to the cash-on-cash return after that point. It doesn't just stay at 20%. It keeps compounding and it hangs out at a 25-30% cash-on-cash return.
AMAZING!
Creating Your Plan
If you want to make a plan in motion for becoming financially free, I invite you to download the spreadsheet that you see in the video. You can change all of the parameters to reflect whatever numbers you feel comfortable investing every single year.
But it’s not just about planning for the amount of money that you are putting in every year. It’s also about projecting your realized profits and cash flow. If you’re trying to generate $100,000, for example, you can see that at the end of Year 8 I generated that exact amount. That’s a 25% cash-on-cash return on the $400,000 that I invested.
Take some time to download the spreadsheet and play around with it. You can very quickly see what happens to your net worth.
If you’re interested in becoming a passive investor in our deals, let’s schedule a call. Go to our website, www.NightHawkEquity.com, and select the “Join” button to start the process.
Thanks for taking the time to educate yourself, and we’ll see you on the next video!
