Multifamily Syndication | Vacation Rental Investing

by Christopher Levarek

“Ninety percent of all millionaires become so through owning real estate.”

- Andrew Carnegie

You might or might not know my story. The story of how I got into investing into real estate that is. I won’t dive into that story today, but let me however share with you the why behind the story.

You see, I used to drive 45 minutes one way to a W-2 job as an IT engineer for corporate America. Every morning, packing the highways with the thousands of other commuters in the blistering hot sun in Phoenix, AZ. I knew there had to be more.

As I drove, I began to listen to podcasts and books on financial wealth and motivation or self-help. Funny enough, as I listened to the many entrepreneurs and successful business owners preach their concepts, I noticed a common thread among all of the most successful and wealthy.

Do you want to know what that thread was? Well here it is. Real Estate.

You see every one of these successful individuals had their wealth or success in some format in real estate. Whether they made their wealth in real estate, or used their wealth to store in real estate, it was there.

This was why I chose real estate as burnt out W-2 earner and unsatisfied 401k holder.

Yet, more to the point of this article, I chose to invest with multifamily syndication and later vacation rental syndication. Now, syndication is just a fancy word for partnership. In every real estate venture I have done, I have partnered with others on projects I could not do alone. This is syndication.

My goal with this article is simply to explain what we do at Valkere regarding investing in multifamily(apartments) as well as vacation rentals. If this helps someone else get started, partner up or better their life, then more the merrier.

So, let’s have a look at syndication…

What is Multifamily Syndication?

Simply put, multifamily syndication, is when management teams and investors come together to purchase & manage an apartment complex. That’s it!

Management teams are the groups of people who find the property, setup the financing, renovate and manage the apartment complex towards a business plan of some kind. Investors are people who believe in the business plan and invest into the property as a co-owner with the management team members.

The project typically has set hold period or timeline before an inevitable sale to the next buyer. During the hold time, renovations and rent increases are made to increase revenues. Expenses are cut down as best as possible. The management team and investors share in the profits from the rents and the ultimate sale of the property.

This is what we do as Valkere Investment Group. We play the role of one of the management teams. We find great investment opportunities and market to potential investors who want to join in the project.

We then coordinate their investments into the project, send updates on the project throughout the hold and distribute cashflow or profits to investors. Throughout the project, we also work with the other management teams to execute the business plan or renovations.

At it’s base level, it is investing into a easy-to-understand business plan backed by a tangible product, an apartment complex. It’s easy to understand for many as most of us have lived in apartments and understand how rents work.

Ok, so multifamily syndication seems straightforward. What about Vacation Rental Syndication?

What is Vacation Rental Syndication?

Vacation rental syndication is when, you guessed it, a management team and investors come together to purchase and manage a vacation rental!

As these are typically single-family homes, the teams needed to purchase, manage and renovate the property are not as large as what an apartment complex might take of course. In fact, Valkere really plays all the roles of the management team.

We coordinate the purchase, financing(loans), renovations and property management within our team. Just like multifamily syndication, we work with other investors who are interested in investing in vacation rentals.

In a joint partnership, investors and Valkere come together to acquire these luxury vacation rentals. These partner investors also have the added benefit of being able to stay at the property once it is listed for rent on platforms such as Airbnb and VRBO.

Partner investors receive updates and distributions once the property is listed and generating rental income. The management team, Valkere, coordinates the management of the property and rents it to people throughout the year who are typically on vacation. Eventually, a sale will occur and the project will come to end with all co-owners sharing in the profits and losses.

Again, it’s this concept of a management team and investors working together to achieve larger goals. These vacation rental projects being smaller are typically with less partners and renovations often are completed in a few months. So the main difference is simply that these projects have a quicker turnaround.

That really is how it works. It’s syndication just like multifamily but at smaller project level.

In Final

Here’s the rub, syndication is partnership. When I started in real estate, I knew I could not do it alone. Whether experience, time or capital, I needed partners to ensure my success. My company, Valkere Investment Group, was born out of this need.

Ultimately Valkere uses syndication in multifamily and vacation rentals to acquire real estate with other partners to allow everyone to reach their goals. It’s about simplifying real estate investing for all involved. Without syndication or partnership, real estate gets very complicated and tiresome.

So whether you are just starting out, investing with others or actively chasing your next deal, remember to keep it simple. Partner your way to success and don’t try to do it all. Do what you love first and foremost. Happy Investing!