Syndication Capital Company Presentation

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Passive Income and Wealth Building Thats
Partnership Powered
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Table of Contents

• Why Apartments?
• Investment Strategy
• Roles
• 7-Step Process
• Sample Deal

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Why Apartments?
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Historically less risk and better returns than
stocks/bonds
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Highest returns out of all real estate asset
classes
Click here for an article on why apartment
returns cant be beat
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Lower your taxable income
Youll lower your taxable income by off-setting
it with the depreciation of the apartment
building. Typically, the depreciation will be
greater than the distributions paid out each
year, which can reduce or even eliminate your tax
bill until you receive your profits from the sale
proceeds.
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Home ownership is significantly dropping
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But population is significantly increasing
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We are a nation of renters. It will continue. Big
time.
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And apartment vacancy rates are falling
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And demand isnt going away

• According to the National Multifamily Housing
  Council and the National Apartment Association,
  the US will need to build more than 4.6 million
  new apartment homes across a range of price
  points by 2030
• Nearly 39 million people live in apartments, and
  the apartment industry is quickly exceeding
  capacity.
• It will take building an average of at least
  325,000 new apartment homes every year to meet
  demand yet, on average, just 244,000 apartments
  were delivered from 2012 through 2016.
• Economic Impact
• Apartments and their 39 million residents
  contribute 1.3 trillion to the US economy and
  generates about 12.3 million jobs annually.
• Demand Drivers
• Changing Lifestyles People are delaying
  marriage and starting a family (19 of all
  households in the US are married couples with
  children compared to 44 in 1960). More than 75
  million people 18 and 34 are entering the housing
  market primarily as renters.
• Demographics Ages 55-plus will account for more
  than 30 of rental households. More than half of
  the net increase in renter households over the
  past decade came from the 45-plus demographic.
• Immigration Growth International immigration is
  expected to account for 51 of all new population
  growth in the US and immigrants have a higher
  propensity to rent and typically rent for longer
  periods of time

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Our Investment Strategy
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Targeting markets with strong apartment
fundamentals and moderate cap rates

• Employment Drivers Strong employment drivers
  provide stable rent income and lower the risk of
  the investment by keeping occupancy rates high.
• Supply Constraints Submarket must have high
  barriers to entry and a population growth
  sufficient enough to absorb scheduled future
  supply.
• GDP Growth Avoiding markets nearing a potential
  bust and are currently experiencing low cap
  rates.
• Multifamily Cap Trends In order to achieve 8
  annual returns, the economics of the metro area
  must be very strong, yet the cap rates of class B
  product cannot be below 5.
• Multifamily Rental Trends Growing rents serve as
  an important indicator of a healthy and stable
  economy with lower associated risk of investment.
• Multifamily Occupancy Trends Healthy occupancy
  rates signal a growing population that is
  outpacing the current supply of new apartments.

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Target Markets

• MSAs selected offer the strongest value-add
  opportunities

Kansas City (5.75)
Cincinnati (5.37)
Las Vegas (5.0)
Columbus (6.25)
Indianapolis (5.37)
St. Louis (6.37)
Nashville (5.5)
Phoenix (4.62)
Austin (4.75)
Atlanta (5.5)
Houston (5.25)
Dallas/Fort Worth (5.75)
MSAs that Syndication Capital currently targets
(x.x)
Avg. cap rate of the stabilized Class B product
in each market
Source CBRE North American Cap Rate Survey,
First Half 2019
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Underperforming Properties with Value-Add
Component

• Our focus is to identify underperforming
  properties that have a value add-component.
• It could be implementing a RUBS program, putting
  in professional management, investing money into
  units to generate market rent, improving
  landscaping or any number of other tactics.
• 10030101 Process

• 100 Deals
• Continuous pipeline of opportunities and high
  level review of each opportunity

• 10 Deals
• Offers on deals that pass underwriting process,
  Intensive analysis conducted, including
  comparable analysis, study of asset and market,
  etc.

• 30 Deals
• More Detailed underwriting on a selection of
  deals that adhere to our investment criteria

• 1 Deal
• Out of 10 offers submitted, 1 deal passes
  intensive analysis and is closed on

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A heavy focus on value-add fundamentals supports
a comprehensive underwriting process

• Proximity to employment drivers/retail
• Quality of competition

• Submarket location
• 2. History of property
• 3. Condition of property
• 4 . Competition
• 5. Select a business plan that will create
  the most value

• Year of construction
• Demographic
• Ownership history

• Exterior deferred maintenance
• Interior vintage and quality

• Rental comparison
• Sales comparison

• Interior or exterior renovation
• Repositioning demographic of tenants
• Complete rebranding

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Typical return and structure on our investments

• 85gt pre-purchase occupancy (walk-in cashflow)
• 100 units or more
• Minimum Metro Population of 250,000
• Our purchases are done using long-term debt at a
  minimum 70 Loan-To-Value.
• Our Debt Investor interest payments are 10 or
  greater depending on investment amount and term.
• Our Equity Investor cash-on-cash annual returns
  average 8 or greater over the life of the
  business plan.
• Profit splits range 70/30 - 80/20 depending on
  business plan.
• Investment hold periods range 5-7 years depending
  on the business plan, with a 5 year IRR target of
  14 or greater.

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Our Roles
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Overview of roles

• Our Investors
• Equity for project
• Mortgage approval (case-by-case basis)
• Our Team
• Identify opportunities.
• Review and underwrite opportunities to assess
  investment viability.
• Perform in-person property and market due
  diligence and research.
• Craft and submit Letter Of Intent.
• Submit and negotiate Purchase Sale Agreement.
• Create Investment Summary.
• Coordinate with professional property inspectors.
• Secure the best financing option for asset.
• Coordinate legal team to create purchase entity,
  partnership agreements and compliance documents.
• Setup operating bank accounts.
• Close on the deal.
• Create investor guide.
• Notify investors of closing.

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Our Process
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Our 7-Step Apartment Buying Process

• Our team finds property that is projected to
  meets the goals of our investors.
• Our team makes offer and negotiates purchase
  price.
• Offer is accepted and deal is shared with our
  investors.
• Our team performs more detailed due diligence on
  property which is a part of our rigorous 100
  point pre-purchase/post purchase process.
• Our team renegotiates the offer based on the
  results of the due diligence (if applicable).
• Legal documents created by the attorney and
  signed by both our team and our investors and the
  mortgage is approved with the signature of a loan
  guarantor (who is a 3rd party or a member of the
  GP).
• The deal is closed.

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Sample Deal
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Sample Apartment Deal

• DISCLAIMER This is a sample deal being shared
  for illustration purposes only. This is not an
  offer to buy or sell, or a solicitation of an
  offer to buy or sell any security or fund
  interest or any financial instrument and is not
  to be considered investment advice. This
  presentation is for institutional use only and is
  not to be distributed to any party other than its
  intended recipient. This is a fictitious
  property, based on an actual deal we explored and
  is representative of the types of deals and
  properties we seek to acquire.
• Property Overview
• Property description
• Unit mix
• Financial Analysis
• Disposition (Sales) Summary
• Yield Projections
• Operating Income and Cash Flow
• Sample 100,000 Investment
• Proforma

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Sample Apartment Deal Property Overview
Property Description Property Description
Purchase Price 12,200,000
Number of Buildings 13 total buildings?1 leasing center?12 residential building
Number of Units 250
Rentable Square Feet 244,024
Price Per Unit 56,000
Year Built 2000
Land size 19.9 acres
Hot water Individual 40 gallon hot water
Utilities/metering Electric - individual (resident pays)?HVAC - individual (resident pays)?Water - individual (resident pays)?Trash - Resident pays 5
Construction Interior - Drywall texture and painted?Roof - Pitched
Parking 357 total spaces?105 carport
Unit Mix Unit Mix Unit Mix Unit Mix Unit Mix Unit Mix
of units Unit Type Bed/Bath Size (SF) Market Rent Rent/SF
23 Palm 2/1 914 740 0.81
1 Palm Upgraded 2/1 914 805 0.88
164 Pine 2/2 964 759 0.79
30 Pine Upgraded 2/2 964 845 0.88
29 Oak 3/2 1096 849 0.77
3 Oak Upgraded 3/2 1096 950 0.87
250 Total/Averages Total/Averages 976 781 0.80
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Sample Apartment Deal Financial Analysis
Equity Return at Sale Equity Return at Sale
Exit Sales Price _at_ 7.5 Cap Rate 20,743,842
Sales Price per Unit 82,975
Sales Expense (622,312)
Loan Balance (23,452,800)
Initial Investment (3,041,056)
Gain at Sale (Appreciation) 6,668,727
Members Net Profit at Sale 4,451,575
Yield Projection (end of year 5) Yield Projection (end of year 5)
Net Cash Flow 2,927,140
Net Profit at Sale 6,668,727
Total Net Return 9,595,867
Total Return on Investment (ROI) 121
Internal Rate of Return (IRR) 20
Operating Income Cash Flow Operating Income Cash Flow Operating Income Cash Flow Operating Income Cash Flow Operating Income Cash Flow Operating Income Cash Flow Operating Income Cash Flow
Members Return on Investment 8.90 13.00 13.90 15.10 16.40 121
  Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Effective Gross Income 2,447,334  2,788,573 2,898,898 2,987,071 3,077,925 14,199,803
Operating Expenses (1,341,501) (1,417,909) (1,486,725) (1,517,920) (1,549,781) (7,313,838)
Net Operating Income 1,105,832  1,370,664  1,412,173  1,469,151  1,528,145  6,885,965 
Debt Service (645,177) (723,761) (723,761) (723,761) (723,761) (3,540,221)
Capital Expenditure Reserves 0  (37,657) (76,451) (77,995) (79,569) (271,672)
Net Operating Cash Flow 386,597  565,151  603,425  657,818  714,148  2,927,139 
Return to Members 270,618  395,605  422,398  460,473  5,165,723  6,714,817 
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Sample Apartment Deal Sample 100,000 Investment
Sample 100,000 Investment Sample 100,000 Investment Sample 100,000 Investment Sample 100,000 Investment Sample 100,000 Investment Sample 100,000 Investment Sample 100,000 Investment
  Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cash Flow Distibutions (A)   8,899 13,009 13,890  15,142  16,439
Members Return on Investment   8.90 13.00 13.90 15.10 16.40
Profits from Sale (B)           57,803
Total Projected Return ( (Sum of A)B)           125,182
Return of Investment           125
Cash Flow (100,000) 8,899 13,009 13,890  15,142  116,439
Summary of 100,000 Investment  Summary of 100,000 Investment 
Total Cash Flows 67,379
Projected Profit at Sale 57,803
Total Projected Returns (Profits Cash Flow) 125,182
Estimated Return on Investment (ROI) 125
Return of Capital (ROC) 2.25x
Internal Rate of Return (IRR) 20
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Sample Apartment Deal ProForma
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Rental Income Year 1 Year 2 Year 3 Year 4 Year 5
GPR 2,468,602  2,725,090  2,832,903  2,919,068  3,007,855 
LTL (103,463) (81,753) (84,987) (87,572) (90,236)
Concessions (12,343) (13,625) (14,165) (14,595) (15,039)
Vacancy (197,488) (163,505) (169,974) (175,144) (180,471)
Employee Units (9,874) (10,900) (11,332) (11,676) (12,031)
Model 0  0  0  0  0 
Bad Debt (24,686) (27,251) (28,329) (29,191) (30,079)
Other Income 326,586  360,519  374,782  386,181  397,927 
Total Income 2,447,334  2,788,574  2,898,899  2,987,071  3,077,926 
Expenses          
Payroll (252,304) (257,397) (262,592) (267,893) (273,300)
Contract Services (100,922) (102,959) (105,037) (107,157) (109,320)
Maintenance (119,845) (122,264) (124,731) (127,249) (129,817)
Advertising (44,153) (45,044) (45,954) (46,881) (47,827)
Admin (37,846) (38,610) (39,389) (40,184) (40,995)
Utilities (264,920) (270,267) (275,722) (281,287) (286,965)
Mgmt Fees (97,893) (111,543) (115,956) (119,483) (123,117)
Taxes (303,775) (309,906) (316,161) (322,543) (329,053)
Replacement Reserves 0  (37,657) (76,451) (77,995) (79,569)
Insurance (119,845) (122,264) (124,731) (127,249) (129,817)
Total Expenses (1,341,502) (1,417,910) (1,486,725) (1,517,921) (1,549,781)
Net Operating Income 1,105,832  1,370,664  1,412,173  1,469,151  1,528,145 
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Are you an accredited investor interested in the
benefits of passively investing in multifamily
apartments? Go to syndicationcapital.net and
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road to being financially free.
Disclaimer No Offer of Securities-Disclosure of
Interests Under no circumstances should any
material at this Ebook be used or considered as
an offer to sell or a solicitation of any offer
to buy an interest in any investment. Any such
offer or solicitation will be made only by means
of the Confidential Private Offering Memorandum
relating to the particular investment. Access to
information about the investments are limited to
investors who either qualify as accredited
investors within the meaning of the Securities
Act of 1933, as amended, or those investors who
generally are sophisticated in financial matters,
such that they are capable of evaluating the
merits and risks of prospective investments.
Copyright  2019 Syndication Capital, LLC.
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