How To Get Investment Returns Fund Managers Are Jealous Of
Wish you were getting better returns on your investments? Wonder where you should put your money to ensure you can keep it safe and sustain strong returns?
Most investment sectors aren’t that appealing today. Bonds have miserable returns. Stocks seem extremely overvalued and poised to be hit with volatility. Interest paid on CDs might actually be up, but it’s still not going to keep you ahead.
There has also been a compression of returns recently. Many funds appear to be lowering their advertised yields or projected performance each year. When you add up the taxes, fees, and inflation, many may end up delivering net negative returns. No one wants that.
This is probably frustrating to most of the stockbrokers and fund managers who have to try and sell these investments to their clients too. Yet, they are facing a lot of challenges. Interest rates are coming up, administration costs (regulatory, labor costs, and risk mitigation) have all become more expensive, and some of these organizations may be having to take on more risk just to offer what they are now.
Some are getting into more subprime type lending behind the scenes. Others are playing roulette in the tech world, knowing that maybe just 1 in 100 of their investments in tech startups will actually pay off.
Or if you’ve been to visit your broker lately, they’ve probably tried to sell you on a variety of funds or collection of funds of funds for extreme diversification that is so broad you can’t generate good returns. They’ve probably already told you that they just don’t know what is going to go up and down or when and how much. So, they just want you to place your chips on every possible option.
The financial sector is also facing the challenge of being able to meet today’s investors’ needs or wealth preservation, growth, and income. More individuals and institutional investors are realizing their need for passive income. Most investments aren’t structured to provide safety, capital growth, and income. They might have one or the other, but it’s rare to find well-rounded options.
This is why more intelligent individual investors are moving to participate in direct investments in multifamily real estate. Often through syndicated deals and partnerships with other accredited investors.
These real estate investments come with a lot of potential tax benefits. Comparing them side by side with another investment, it is the taxes that can make all the difference in how much you actually get back and get to keep.
Brick and mortar assets provide a nice safety cushion. Though they have routinely kept up with or far exceeded inflation too. That has been particularly true of property prices and rents.
These rents translate into passive income distributions which can be taken as surplus income or may be reinvested to accelerate capital gains and income streams until investors need the money.
Perhaps most notable about the multifamily asset class is the ability to make improvements and reposition properties to boost the value of capital and assets. This can be done effectively in all phases of the economy.
Today, wise multifamily investment syndicators may advertise a low (but strong) returns of around 8%, but that can be a lot higher once you exit, do your taxes and measure your total net returns. Especially when compared to what you’d get in other asset classes.
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.