12 Must-Know Items to Ask When Buying Apartments

12 Must-Know Items to Ask When Buying Apartments

Investors are chasing different asset classes for a healthier return, but it is important to understand some key elements of Multifamily real estate before jumping in.

Here are 12 items you MUST KNOW before purchasing an apartment complex either as a Limited Partner through a syndication or a JV with only a few partners.

1. Why is the owner selling?

Multifamily property owners come in different shapes and sizes. 

Understanding the motivation behind the sale is critical to positioning yourself much better. 

Is this a motivated owner or ownership group? Below are some examples of motivated sellers: 

  • Tired Landlord
  • Poor operations 
  • Partner or Family fighting
  • Divorce
  • Bankruptcy
  • Health Issues
  • Retirement
  • Relocation
  • Inherited Property
  • Code Violations
  • Desire New Property
  • 1031 Exchange
  • Loan Terms not favorable

Getting the story of the property will help you create a viable solution that is a win-win solution for you and the seller.

Perhaps you are considering investing as an LP, does your sponsor have a story for this deal? Is this an opportunity that they know intimately and got off-market for 10% less than anyone else wanted to pay for it due to relationship?

2. Exactly what is included in the sale?

We recently were negotiating on a small apartment complex with a seller. Developers in the area are building and selling townhomes for $450-600k each. 

The Property itself barely cashflowed at current rents; however, we were given the impression that a large lot next to the property was included. This lot would add $350k in profits to the deal. However, once a survey was conducted, the lot next door was NOT included. 

Understanding what is included in the transaction may seem obvious, but ask. Perhaps there is a laundry facility; however, the washer/dryer units are not included. Perhaps an adjoining park is not included. 

3. How long has the property been on the market?

This information would be readily available from the listing broker and can be very insightful

  1. It is brand new on the market the agent is “pre-listing’ it as off-market which means you have an opportunity to make offer prior to many others. 
  1. It has been on market for a long while which means everyone has provided feedback to the broker and the seller about this property and the seller has not accepted any offers to date. 

Both provide advantages. If you are receiving a truly off-market deal from a broker you have a genuine relationship with, there is an opportunity to strike a fair deal for all parties involved. This is due to the broker trusting you to get deals done and recommending to his client to accept. 

If a listing is sitting for some time, it is likely that this deal has a seller that cannot or will not negotiate, or there is something structurally wrong with the property. These are items to uncover that can help negotiate a better deal for all parties. 

4. Has the property repeatedly changed ownership over a relatively short period of time?

Understanding the ownership tenure can uncover a story. An owner who has only owned the property less than 2 years may be in a motivated position to sell: 

-Bridge Loan could be coming due

-Overspent on renovations

-Overall mismanagement

An owner that has owned a property for 10-20 years may have different motivations: 

-Retiring from Landlording

-Realizing capital gains for another purchase

-Does not want this type of asset any longer (moving into a different class of apartments or into different real estate)

Low interest rates and a surplus of cash in the open market has brought a lot of attention to the multifamily space. For this reason, there have been deals that have traded hands much faster than the business plan called for with rents escalating 8-20%. 

Owners have been able to “renovate” by painting and adding new lighting and see an immediate return on investment. 

When walking these properties, take note of potential capital expenditures that could be on the horizon. 

5. How did the agent decide on the asking price?

This is going to boil down to 2 factors: 

  1. Cap rate
  2. T12 or Proforma

Agreeing on a market cap rate can be relatively easy. If properties are trading at 6 cap, then it is reasonable to have a property listed at a 5.5-6.5 depending on condition. This is assuming it is an equal class/structure property. 

What is more important to understand is what the cap rate is based on. Did the agent and seller determine sale price based on ProForma numbers or actuals (T12). This usually makes a big difference. 

If current NOI on a property is $1,000,000 and market is 6 cap, then sale price should be: $16,500,000. 

However, if that same property is being marketed as “value-add” with “upside potential in rents” and a ProForma NOI is presented of $1,200,000, the agent/seller are expecting $20,000,000 at the same 6 cap market rate. 

This is a $4 Million difference in price and should be considered before making an offer and purchasing. When seeking financing on this property, the bank will review 12-month and 3-month financials and will offer terms based on this, not potential or Pro-Forma rents and budgets. 

6. What is the minimum price the seller will accept?

This seems obvious; but, not everyone asks it. It is especially impactful in direct seller conversations. 

This is not usually a question to ask immediately unless you want a repeat of the sales price. 

If you have developed a rapport with the seller or have a very strong relationship with the listing broker, it is possible to not only uncover the story of the property, why they are selling and also what a lowest possible accepted offer would look like.

7. What offers have there been so far?

If the property has been listed for some time, finding out what offers have been made (and therefore rejected) is a great way to uncover seller desired price (above). 

It is possible that offers were reasonable; but, the potential buyers did not display a strong ability to close and therefore, the seller/broker did not want to remove the property from the market to wait for a buyer that was not able to close. 

8. Has any major work been done to the property?

As discussed earlier, getting insight to what work has been done will affect your capex budget and therefore your offer. 

Understanding age of roof, air conditioning units, type of heating (does it have a boiler?), potential parking lot repairs/ upgrades. 

9. How old is the property?

The age of the building can affect your overall operating budget. Older buildings have older plumbing, older electric, older everything. 

Old = Increased Maintenance costs

  • Roof
  • HVAC / Furnace / Boiler system
  • Parking Lot
  • Electric panels / wiring
  • Plumbing 

These are key capital items to be aware of when considering a property.

10. Will the owner do seller financing?

The option of seller finance on a deal can make or break some opportunities. If the seller is looking for exit management responsibilities; but, will miss the cash flow, seller finance is an option to get both. 

In addition, if the sale price cannot be agreed upon due to current market conditions, putting an offer together at the asking price contingent on seller finance terms makes a win-win situation. 

By avoiding traditional bank financing, a transaction can be closed with agreeable terms mutually agreed to by both parties at a quicker pace. The seller gets at or close to his desired price point and the buyer is able to take over the property and begin optimizing before getting bank financing involved. 

11. What is the screening process for new residents?

If the financials show that there is a higher than average bad debt or perhaps the turn rate is not in line with the market, it is potentially an opportunity to improve operations based on up front tenant screening. 

The current process can be checked through asking the owner/ property manager; but, it is good practice to “secret shop” a property you are interested in purchasing. 

This means, “playing the part” of an interested tenant and calling / visiting not only the subject property; but, properties nearby that would qualify as comparable. 

-is the subject property too lax on tenant standards 

– on the reverse side, requirements can be too strict causing too few tenants to be approved and signing leases (also a problem)

12. What kind of financing is currently on the property?

Does the subject property have an underlying mortgage that they need to pay off or is the property owned free and clear? 

Is the current loan a bridge loan that had a temporary low interest rate and it is coming due? 

Does the current loan have a significant amount of time left on the note?

Knowing the underlying debt will add to the story of why the seller is selling and true motivation. 

If you would like to learn more about the various types of real estate investments and syndications we have coming online, please join our investor club to gain access. 

As a top-performing sales professional in supply chain/logistics for almost 20 years, Jeff Davis has been putting his commissions to work for him in real estate since 2015 and is now partnered in almost 2000 units across 4 states in the US

8 Best Strategies To Defer Capital Gains Tax

8 Best Strategies To Defer Capital Gains Tax

Taxes on real estate profits can be deferred or even avoided if you prepare correctly ahead of a sale. 

Here are the 8 most common strategies to defer capital gains tax that investors use each year.

What are Capital Gains?

Capital gains tax is a tax on the profit from selling a capital asset, such as a stock, bond, or real estate. Depending on the asset type and the time it has been held, the treatment of gains can vary. 


There are two main types of capital gains: short-term and long-term.

Short-Term Capital Gains

Short-term capital gains refer to profits on assets held for 1 year or less. These taxes will be the same rate as ordinary income which can be as high as 37%. So, if someone makes $35,000 per year and buys and sells a house as a flip and makes a $100,000 profit, that person would jump from the 12% tax bracket to the 24% tax bracket paying and would owe: $32,400 in taxes.

Long-Term Capital Gains

Long-term capital gains are gains on assets held for 366 days or more.  The tax rate for long-term capital gains is typically lower than the rate for short-term gains. For individuals in the highest tax bracket, the current long-term capital gains tax rate is 20%. The tax for this scenario for the same income individual would be $24,200 which is almost $10,000 less. 

1.  Seller Finance

Seller financing in real estate refers to a situation where the seller of a property acts as the lender, providing all or a portion of the financing for the buyer to purchase the property. Along with the contract, the seller will create a promissory note, that outlines the terms of the loan, including the interest rate, monthly payments, and length of the loan. 

Payments will be made directly to the seller or an escrow company as opposed to a bank. This is an attractive option for both parties if: 

  1. The buyer does not qualify for traditional financing, or 
  2. The seller wants to sell the property quickly and does not wish to wait to find a buyer with traditional financing. 
  3. This also allows the seller to defer capital gains tax through installment sale payments. 

When a property is sold, the seller is subject to capital gains taxes on the profit made from the sale. However, when the seller uses seller financing, these taxes are deferred by spreading the profit out over the life of the loan. This is done through a technique called a “installment sale”, which allows the seller to recognize the gain on the sale over the term of the loan, rather than all at once.

In an installment sale, the buyer makes payments to the seller, which include both interest and a portion of the principal. As these payments are made, the seller recognizes a portion of the gain on the sale and reports it as income on their taxes. 

The benefit of this for the seller is that they can spread the tax liability over several years, rather than paying it all at once. This can reduce the overall tax burden and make it more manageable for the seller.

2. Donate

By donating a portion of the profits from the sale of real estate to a qualified charitable organization, sellers of real estate can use charitable donations to defer or avoid capital gains taxes on the profits from the sale of a property. 

The IRS allows taxpayers to claim up to 30% of the seller’s adjusted gross income for a charitable contribution deduction for donations of appreciated property, such as real estate, as long as the donation is made to a qualified organization. The donation must be made in the same year as the sale of the property.

A creative method to defer capital gains taxes is by using a charitable remainder trust. To complete this, the seller donates the property to a charitable remainder trust, which sells the property. The proceeds are used to fund the trust. Once the trust is funded, the seller can receive income from it for a specified number of years or the remainder of their life. 

Once the income interest ends, the remaining trust assets go to a charity of choice. The seller can claim a charitable contribution deduction for the present value of the remainder interest that will eventually go to charity, and the capital gains taxes are avoided altogether.

3. 1031 Exchange

A 1031 exchange, also known as a “like-kind exchange” or a “Starker exchange,” is a tax strategy that allows investors to defer paying capital gains taxes on the sale of an investment property by using the proceeds from the sale to purchase a similar property. The name “1031” comes from the section of the Internal Revenue Code that describes the rules for these types of exchanges.

To qualify for a 1031 exchange, the properties involved must be “like-kind.” This means that the properties must be used similarly. For example, an investor can exchange a rental property for another rental property or a piece of raw land for a developed piece of land. The properties are not required to be identical, but they must be exact in nature or character.

The process of a 1031 exchange typically involves three parties: 

  • The investor (seller), 
  • A qualified intermediary, 
  • The buyer.

The investor must sell the relinquished property and use the proceeds to purchase the replacement property within a specific time frame, usually 180 days. This limited time frame is often a challenge for some investors when considering the 1031 Exchange method. 

The qualified intermediary holds the proceeds from the sale of the relinquished property until they are used to purchase the replacement property. This allows the investor to defer paying capital gains taxes on the sale of the relinquished property until the replacement property is sold

When the replacement property is sold, capital gains taxes will need to be paid unless another 1031 Exchange is performed to continue the cycle.

4. Energy-Efficient Improvements

Energy efficient improvements are upgrades or modifications made to a property that help to reduce its energy consumption and costs. These improvements can be made to both residential and commercial properties and can include a variety of different measures such as:

  • Insulation: Adding or upgrading insulation in the walls, attic, and floors can help to reduce heat loss in the winter and heat gain in the summer.
  • HVAC systems: Replacing an old furnace or air conditioner with a newer, more efficient model.
  • Windows and doors: Replacing old, drafty windows and doors with newer, more energy-efficient models.
  • Lighting: Replacing old incandescent light bulbs with newer LED or CFL bulbs.
  • Solar panels: Installing solar panels on the roof of a building can help to generate electricity, reducing the need to purchase power from the grid.
  • Smart home systems: Installing smart home systems such as thermostats, lighting controls, and appliances.

Some government programs may offer tax credits or incentives for making these types of improvements.

Energy efficient improvements can help to defer capital gains tax in several ways:

  1. Cost segregation: By separating the cost of energy-efficient improvements from the cost of the property, an investor can depreciate the improvements over a shorter period of time, thus deferring capital gains taxes when investing in a new property. 
  2. Tax credits: Some energy-efficient improvements qualify for federal or state tax credits, which can offset the cost of the improvements and reduce the overall tax liability.
  3. Conservation Easement: By donating a conservation easement on your property to a qualified organization, you can claim a charitable contribution deduction for the decrease in value of your property caused by the development restriction. This can help to reduce or avoid capital gains tax if the property was sold at a profit.

5. Bonus Depreciation

Bonus depreciation is a tax incentive that allows businesses to immediately write off a larger portion of the cost of certain property types, such as equipment and real estate improvements. This allows businesses to deduct a larger portion of the cost of the property in the year it was placed in service rather than depreciating it over several years.

The bonus depreciation percentage and the types of property that qualify for the incentive have changed over time. Since 2017, the bonus depreciation percentage has been set at 100%. This means businesses can immediately write off the entire cost of qualified property in the year it is in service rather than over several years.

This bonus depreciation applies to both new and used qualified property, including tangible personal property with a recovery period of 20 years or less, certain qualified film, television and live theatrical productions, and certain qualified improvement property.

It’s important to note that bonus depreciation is a temporary tax incentive and the percentage and types of property that qualify can change. Additionally, bonus depreciation can only be claimed by businesses and not by individual taxpayers, and the specific rules and regulations regarding bonus depreciation should be consulted with a tax professional.

6. Pre-Tax Retirement Account

A pre-tax retirement account is a type of investment account that allows an individual to make contributions to the account using money that has not yet been taxed. This means that the contributions are made with pre-tax dollars, and the money in the account grows tax-free until it is withdrawn in retirement.

The most common types of pre-tax retirement accounts are 401(k) plans and traditional Individual Retirement Accounts (IRAs). 401(k) plans are sponsored by employers, and employees can make contributions to the plan through payroll deductions. Traditional IRAs are individual accounts that can be opened and funded by anyone who meets the eligibility requirements.

Both 401(k)s and traditional IRAs have contribution limits, which change from year to year. These limits are set by the government and are in place to ensure that the accounts are used for long-term savings and not as a way to avoid taxes on short-term income.

When the money is withdrawn from a pre-tax retirement account in retirement, it is taxed as ordinary income. The advantage of a pre-tax retirement account is that it allows an individual to save for retirement and reduce their current tax bill, but the disadvantage is that the money will be taxed when it is withdrawn.

It’s important to note that there are also post-tax retirement accounts, such as Roth 401(k) and Roth IRA, in which the money contributed is taxed upfront but the withdrawals in retirement are tax-free.

7. Sell Property at Loss

It is not the most popular method, but investors can sell a property at a financial loss to reduce overall capital gains taxes. This is especially common when trading equities in the stock market and a particular stock trade has done exceedingly well, an investor may choose to balance the losses of another with the ability to avoid the total burden of capital gains taxes. 

The same method can be had for a large real estate transaction in which an investor can use real estate to offset other gains in the portfolio and reduce capital gains. 

The investor is possibly creating a ‘paper loss’ that does not accurately reflect the actual profitability of the transaction but simply needs a loss to offset capital gains. This is most often done using cost segregation studies and bonus depreciation. 

8. Opportunity Zone Investment

Another tax loophole created by the Jobs act of 2017 is Opportunity Zone. This program provides tax incentives for investors to invest in low-income communities. It aims to stimulate economic development and job creation by providing tax benefits to investors who invest in these communities.

Designated by the governor of each state, Opportunity Zones are selected from a pool of low-income communities identified by the U.S. Census Bureau. These areas typically have high poverty rates, low median income, and a lack of investment.

Investors can invest in Opportunity Zones through Opportunity Funds, which are investment vehicles that pool capital from investors to invest in an eligible property located in Opportunity Zones. The primary tax benefit of investing in an Opportunity Zone is the ability to defer and potentially reduce capital gains taxes.

Proceeds from real estate that are invested into an Opportunity Fund within 180 days, can defer absorbing taxes on the capital gain until 2026. If the investment is held for at least five years, the investor can get a 10% reduction of the deferred gain, and if it’s held for at least 7 years, an additional 5% reduction. Additionally, if the investment is held for at least 10 years, the investor can permanently exclude the appreciation of the investment from capital gains taxes.

If you would like to learn more about the various types of real estate investments and syndications we have coming online, please join our investor club to gain access. 

As a top-performing sales professional in supply chain/logistics for almost 20 years, Jeff Davis has been putting his commissions to work for him in real estate since 2015 and is now partnered in almost 2000 units across 4 states in the US

25 Of The Best Ray Dalio Quotes On Life, Success & Investing

25 Of The Best Ray Dalio Quotes On Life, Success & Investing

“Principles are what allow you to live a life consistent with those values. Principles connect your values to your actions.”

ray dalio

“To make money in the markets, you have to think independently and be humble.”

ray dalio

“When you think that it’s too hard, remember that in the long run, doing the things that will make you successful is a lot easier than being unsuccessful.”


“By and large, life will give you what you deserve and it doesn’t give a damn what you like. So it is up to you to take full responsibility to connect what you want with what you need to do to get it, and then to do those things.”


“Do not feel bad about your mistakes or those of others. Love them! Remember that one: they are to be expected; two: they’re the first and most essential part of the learning process; and three: feeling bad about them will prevent you from getting better.”


“Success is achieved by people who deeply understand reality and know how to use it to get what they want. The converse is also true: idealists who are not well-grounded in reality create problems, not progress.”


“School typically doesn’t prepare young people for real life – unless their lives are spent following instructions and pleasing others. In my opinion, that’s why so many students who succeed in school fail in life.”


“More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively.”


“Time is like a river that carries us forward into encounters with reality that require us to make decisions. We can’t stop our movement down this river and we can’t avoid those encounters. We can only approach them in the best possible way.”


“Choose your habits well. Habit is probably the most powerful tool in your brain’s toolbox.”


“Having the basics, a good bed to sleep in, good relationships, good food – is most important, and those things don’t get much better when you have a lot of money or much worse when you have less. And the people one meets at the top aren’t necessarily more special than those one meets at the bottom or in between.”


“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.”


“Listening to uninformed people is worse than having no answers at all.”


 “I learned that if you work hard and creatively, you can have just about anything you want, but not everything you want. Maturity is the ability to reject good alternatives in order to pursue even better ones.”


 “If you can’t successfully do something, don’t think you can tell others how it should be done.”


“Every time you confront something painful, you are at a potentially important juncture in your life – you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion.”


“If you don’t look on yourself and think, ‘Wow how stupid I was a year ago,’ then you must not have learned much in the last year.”


“Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money. How much would you sell a good relationship for? There’s not enough money in the world to get you to part with a valued relationship.”


 “Most of life’s greatest opportunities come out of moments of struggle; it’s up to you to make the most of these tests of creativity and character.”


“Don’t mistake possibilities for probabilities. Anything is possible. It’s the probabilities that matter. Everything must be weighed in terms of its likelihood and prioritized. Believe it or not, your pain will fade and you will have many other opportunities ahead of you.”


“Great is better than terrible, and terrible is better than mediocre, because terrible at least gives life flavor.”


“You must not let your need to be right be more important than your need to find out what’s true.”


“By and large, life will give you what you deserve.”


If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.”


“Remember that weaknesses don’t matter if you find solutions.”


As a top-performing sales professional in supply chain/logistics for almost 20 years, Jeff Davis has been putting his commissions to work for him in real estate since 2015 and is now partnered in almost 2000 units across 4 states in the US

Learn how your commissions earn commissions at https://www.bridgestoneinvest.com/join/

401K vs. Real Estate: Which is Best?

401K vs. Real Estate: Which is Best?

There is much debate on which is better, how much, and why. There are valid arguments on both sides of this argument as well. 

Deciding which path to take affects your financial future, and understanding it is essential. 

If we look at the advantages of both, it can help clear the air and help you decide which is best for you. 

401(k) plans and real estate investing are both popular options for saving for retirement. Here are some advantages of investing in a 401(k) plan compared to real estate:

401(k) VS. Real Estate

Ease: One advantage of 401(k) plans is that they are easy to set up and manage. Many employers offer 401(k) plans and automatically enroll employees unless the employee opts out. 

Contributions to a 401(k) plan are also automatically deducted from an employee’s paycheck, so there’s no need to remember to make contributions.

Tax advantages: 401(k) plans offer several tax benefits that can help investors save for retirement. Contributions to a 401(k) plan are made with pre-tax dollars, which can lower an investor’s taxable income in the current year. 

In addition, the money in a 401(k) plan grows tax-free until it is withdrawn in retirement.

Protection and safety: 401(k) plans are generally considered a safe and stable option for retirement savings. The money in a 401(k) plan is typically invested in a diversified portfolio of stocks, bonds, and mutual funds, which can reduce the risk of losses. 

401(k) plans are federally insured, which means that account holders’ savings are protected if the plan’s sponsor goes bankrupt.

Other advantages: A few other advantages to investing in a 401(k) plan are worth considering. Many employers offer matching contributions to their employees’ 401(k) plans, free money for the employee. 

In addition, 401(k) plans have high contribution limits, meaning that investors can save much more money in a 401(k) plan than in other retirement accounts, such as traditional IRAs.

Overall, investing in a 401(k) plan is a great way to save for retirement. It offers ease, tax advantages, protection and safety, and the potential for matching contributions from an employer. However, it is essential to remember that 401(k) plans are not the only option for retirement savings. 

Financial advisors can help investors determine the best way to save for retirement based on their circumstances. Investing in a 401(k) plan can be a good option for those who want a simple and easy-to-manage retirement vehicle, but there may be better choices for some. 

In particular, those who are self-employed or work for a small business that does not offer a 401(k) plan may consider other options, such as traditional IRAs or real estate investing. 

Ultimately, the best way to save for retirement will depend on an individual’s financial goals, risk tolerance, and investment portfolio.

Real estate Vs. 401(k)

Investing in real estate can be a great way to save for retirement and achieve financial freedom. Here are some advantages of investing in real estate compared to 401(k) plans:

  1. Higher margins: Real estate investments can offer higher margins than 401(k) plans. The stock market has the potential for high returns but can be volatile. Real estate has the potential for steady, long-term growth. Real estate investors can achieve high returns with the right strategy and consistent action.
  1. Many ways to make money: There are many ways to make money with real estate investments. In addition to equity and forced appreciation, real estate investors can benefit from tax advantages, rental income, and hedging against inflation. These various income streams help diversify an investment portfolio and provide a steady cash flow.
  1. Tax advantages: Like 401(k) plans, real estate investing offers tax advantages. Real estate investors can deduct mortgage interest, property taxes, and other expenses from their taxable income, lowering their overall tax bill. In addition, real estate investors can benefit from the 1031 exchange, which allows them to defer capital gains taxes when they sell a property and reinvest the proceeds in another property.
  1. It’s protected: While the stock market can be volatile, real estate is a tangible asset that is less prone to market fluctuations. This means that real estate investments can be a more stable and secure way to save for retirement.
  1. Leverage: Real estate investing allows investors to leverage their money by using borrowed funds to purchase a property. Leverage allows investors to buy a larger property or invest in multiple properties, which can increase their potential returns.
  1. Unlimited: Unlike 401(k) plans, which have contribution limits, there is no limit to how much money an investor can put into a real estate investment. This makes it an excellent option for those who want to save as much as possible for retirement.
  1. No penalties: While 401(k) plans have early withdrawal penalties for those who take out their money before retirement, real estate investments do not have such penalties. This can make real estate a more flexible option for those needing access to their money before retirement.
  1. Non-efficient markets: While the stock market is often efficient, real estate markets can be less efficient, creating opportunities for savvy investors. Inefficiency makes real estate more attractive for those who want to take advantage of market inefficiencies.

Real estate investing can be a great way to save for retirement and achieve financial freedom. While it comes with its own risks, the potential for high returns, tax advantages, and stability make it an attractive option for many investors. 

Those interested in real estate investing can consider using a self-directed IRA or Roth IRA to save for retirement, or they can invest in rental properties, apartment buildings, or real estate investment trusts.

Who Wins?

Luckily, this battle ends in a draw because as an investor, you have the option of doing one, the other, and even other investment vehicles. The ultimate goal is to maximize income, reduce taxable income and increase retirement as quickly and safely as possible. 

By maximizing tax-advantaged investments and putting the remainder of your savings into a cash-flowing investment property or syndication, you are creating a hybrid retirement strategy. 

In addition, you can use your self-directed IRA or 401k to invest in real estate. 

Self-Directed IRA

A self-directed individual retirement account (IRA) is a type of retirement account that allows the account holder to have more control over their investment options. With a self-directed IRA, you can invest in a broader range of assets beyond traditional stocks, bonds, and mutual funds, such as real estate, precious metals, and private placements.

There are two main types of self-directed IRAs: traditional IRAs and Roth IRAs. A traditional IRA allows you to contribute pre-tax dollars, which can grow tax-deferred until you begin taking withdrawals in retirement. A Roth IRA, on the other hand, allows you to contribute after-tax dollars, and the contributions and any earnings can be withdrawn tax-free in retirement, provided certain conditions are met.

Using a self-directed IRA to invest in real estate can be an excellent way to diversify your retirement portfolio and potentially generate additional income. However, it’s essential to keep in mind that some rules and restrictions must be followed when using a self-directed IRA to invest in real estate. 

For example, the IRA cannot be used to purchase a property that you or certain disqualified persons (such as your spouse, children, or specific business associates) will personally use. It’s essential to carefully research and understand these rules before using a self-directed IRA to invest in real estate.

Investing in real estate through a self-directed individual retirement account (IRA) can be a powerful tool for building wealth and achieving financial freedom. With a self-directed IRA, you have the ability to invest in a wide range of assets beyond traditional stocks, bonds, and mutual funds, including real estate, precious metals, and private placements. 

Here are a few things to consider if you’re thinking about using a self-directed IRA to invest in real estate:

Benefits of Investing in Real Estate with a Self-Directed IRA:

  • Diversification: Real estate can be a good way to diversify your retirement portfolio and potentially generate additional income through rental properties. 

Owning a rental property can provide a steady stream of rental income, and the value of the property may appreciate over time.

  • Potential tax benefits: Owning real estate through a self-directed IRA can provide tax benefits in the form of deductions for mortgage interest, property taxes, and certain types of expenses related to the property. These deductions can reduce the overall tax burden on your retirement income.
  • Control over investment decisions: With a self-directed IRA, you have more control over your investment decisions and can choose to invest in specific properties or projects that align with your investment goals and risk tolerance.

Drawbacks of Investing in Real Estate with a Self-Directed IRA:

  • Risk: Investing in real estate carries inherent risks, such as the potential for vacancies and unexpected repairs. These risks can impact the overall performance of your self-directed IRA.

Real estate syndications can be another option for those interested in investing in real estate through their self-directed IRA. A real estate syndication involves a group of investors coming together to fund the acquisition and management of a property or properties. 

The syndication can be a partnership, limited liability company, or corporation. One of the main benefits of investing in syndication is the ability to pool resources with other investors and access larger, potentially more lucrative investment opportunities.

Using a 401(k) or IRA to invest in real estate can also be a good option for those who want to diversify their retirement portfolio and potentially generate additional income. With a 401(k), you can roll over your account balance into a self-directed IRA, which will allow you to invest in a wider range of assets such as real estate. 

However, it’s important to carefully research and understand the rules and restrictions that apply to using retirement funds to invest in real estate, as well as the potential risks and rewards.

Should you invest in Real Estate or other asset Classes? 

This is completely personal and several factors such as market, risk tolerance, runway (how much capital vs. expenses), what timeframe is your expectation of return? 

Depending on your investment profile, you might like real estate or it might not be an ideal investment. 

If you would like to learn more about the various types of real estate investments and syndications we have coming online, please join our investor club to gain access. 

As a top-performing sales professional in supply chain/logistics for almost 20 years, Jeff Davis has been putting his commissions to work for him in real estate since 2015 and is now partnered in almost 2000 units across 4 states in the US

How Can I Retire With $300k

How Can I Retire With $300k

When planning for retirement late in working years, there are two primary focus areas that this blog will focus on:



Most of my generation will rely on income sources other than Social Security benefits for retirement. Certified Financial Planners agree that while eligibility is available at 65, there is a larger payout if you can wait until age 70. If this is possible, it will make the social security income higher.

Retirement Planning is best done early, but the good news for someone that does not have a target fund, there are options.

How much do I Need for retirement?

If you are curious about your estimated Social Security Administration benefits, here is the official benefit retirement calculator.

The average retirement savings for ALL WORKERS is $97,000. Savings expectations for a comfortable retirement is $1.04 Million. In 2021, only 56% of workers were enrolled in a workplace retirement plan and contributed to their retirement account balances.

The average life expectancy in the US and peer countries is currently 76. The current retirement age is 62; on average, we will need 14 years of “income” to care for our daily needs. This is likely where the common retirement goal of $1,000,000 originates with roughly $70,000+ per year for 14 years is $1,000,000. In principle, $70,000 per year is considered a comfortable retirement. That is if the house is paid off and Medicare absorbs most medical expenses.

Any financial advisor will advise a young person entering the workforce to build a nest egg of 5-10% of their annual income and invest this money to earn 7-8% investment return per year.

As you approach retirement age, having a clear picture of your retirement lifestyle will become essential to visualize. This picture will need to drive your investment objectives which will cause your asset allocation and emergency fund. This can take several years and discipline; however, consistently working on your investment strategy and working toward this goal will get you (and your bank account) there.

Regardless of where you are in the retirement planning phase of your life, now is the best time.

But what if someone is approaching retirement and only has $300k? What can she do as solid income-producing years are likely behind her? Even if someone has $1M in the portfolio, what are some of the best ways to grow this in the next 5-10 years?

Increase Income

How can you create additional sources of income when you are exiting the workforce? Finding a job will not be the best use of time; instead, it is better to put current and retirement assets to work as additional income. The near or post-retirement-age person should focus on a lower cost of living and finding extra income.

If you are trying to exit the workforce with early retirement, then this is a matter of ensuring you have enough income (or savings) minus expenses month over month and year over year. That is until your Social Security benefits, pension, and other benefits take effect.

Passive Income

Suppose you are in the position of our protagonist, with only 300k. In that case, you should seek out passive investment vehicles such as annuities and multifamily syndications that can provide income to you without additional labor.


Syndications are real estate transactions in which people pool their funds to purchase commercial properties. There is a Managing Partner and a Limited Partner. The managing partner(s) can have multiple people responsible for the business plan and asset allocations and are the asset managers. The limited partners are the silent partners who receive monthly income or quarterly dividends into their savings account or Roth IRA as an incentive for investment.

Usual timeframes for Syndications are five years of payments + total return of principle. Average returns are typically 18-22% IRR (internal rate of return annually).

Syndications are common in Multifamily (apartments), Self-Storage, Office Buildings, and Industrial. Most large investment offerings that are not going public; but are still regulated by the SEC will be syndication.

I am using the Conveyor Belt theory pictured below. 

  • Year 1, invest in syndication and begin collecting the dividends (6%) – $3000
  • Year 2, invest in a 2nd syndication and collect on dividends from deal 1 + 2 – $6000
  • Year 3, invest in 3rd, collect on dividends from 1+2+3-$9000
  • Year 4, invest in 4th, collect on 1+2+3+4-$12000
  • Year 5 invest in 5th, collect on 1+2+3+4+5-15000
  • Year 5, exit from deal 1: $100,000
  • Total Passive Income Year 5: $115,000
  • Year 6, invest $100k on 6th: $18000
  • Year 6, exit from deal 2: $100,000
  • Total Passive Income Year 6: $118,000

And the cycle continues. 

By consistently putting capital into real estate syndications, you enable yourself to cash flow, build equity, and receive tax benefits from owning real estate. Re-investing the capital offsets capital gains taxes as well.


Annuities are insurance products with monthly distributions of 4-6% payments for life. With numerous structures and benefits, Annuities are another passive income vehicle available. Annuities can be purchased on different timeframes offering higher yields with the longer-term product.

The general rule of thumb is you want to double your assets’ worth every five years (20% IRR or Internal Rate of Return). In a volatile environment, stock prices can reduce the value of mutual funds and the overall investment returns of a portfolio. This makes investing in any brokerage account scary and reduces the amount of money someone would want to invest.

Understanding your risk tolerance and the past performance of the vehicle you choose will be equally crucial to the investment advice you receive from any financial experts.


Diversifying becomes more critical at this stage, and receiving cash dividends is essential to cover monthly / retirement expenses such as utilities and unexpected repairs.

Understanding your monthly expenses will be stepping ONE to knowing if you have enough money to retire or if you need to wait until full retirement age.

Also, understanding how much money you can cut to invest wisely to increase monthly or quarterly distributions will help on this journey. Such things will significantly improve the ability to reduce the overall retirement goals and develop a solid retirement strategy.

The good sense to not purchase unnecessary items such as a new car every 3-5 years and keeping your monthly expenses elevated is vital in retirement years.

The rule of thumb is that 4% is a safe withdrawal rate from your savings/retirement accounts/Social Security. In retirement, you are responsible for 100% of your medical care.

Your monthly budget on the right track will set you up for long-term success, even with a smaller retirement account.


In retirement, income taxes should be lower, but receiving tax advice and additional information from a certified financial planner is a good idea. They can help guide you on potential tax breaks and how much gross income / pre-retirement income/investment income to invest in the stock market, annuities, syndications, and what your entire retirement portfolio should look like.

Learn more at https://www.bridgestoneinvest.com/join/

Top 20 Quotes on Passive Income for Sales Professionals

Top 20 Quotes on Passive Income for Sales Professionals

If you don’t find a way to make money while you sleep, you will work until you die

Warren Buffett

You become financially free when your passive income exceeds your expenses.

T. Harv Eker

Earn with your mind, not your time.

Naval Ravikant

Don’t work your way up; work your way out!


Entrepreneurs are willing to work 80 hours a week to avoid working 40 hours a week.

Lori Greiner

Financial Independence is all about having more choices.

Robert Kiyosaki

I’m a huge believer in diversifying your passive income streams. Diversification means you’re not depending on just one source to meet all of your needs. 

Donald Trump

Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.

Paul Samuelson

I personally feel that the #1 benefit of having my expenses covered by passive income is that i get to keep doing a lot more of the kind of work I enjoy. I also get to work the way I want to work – where I want, when I want, how I want, and with whom I want.

Steve Pavlina

It’s not about the action you offer, it’s about the alignment with the dream. It’s about alignment with the real resource.

Abraham Hicks

Life begins at the END of your comfort zone.

Pat Flynn

Make the money, don’t let the money make you. Change the game, don’t let the game change you.


Money is only a tool. It will take you wherever you with, but it will not replace you as the driver.

Ayn Rand

My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.

Steve Jobs

Financial fitness is not a pipe dream or a state of mind. It’s a reality if you are willing to pursue it and embrace it.

Will Robinson

Financial independence is about having ore choices.

Robert Kiyosaki

You must gain control over your money or the lack of it will forever control you.

Dave Ramsey

Formal education will make you a living; self-education will make you a fortune.

Jim Rohn

To become financially independent you must turn part of your income into capital; turn capital into enterprise; turn enterprise into profit; turn profit into an investment, and turn investment into financial independence.

Jim Rohn

Your economic security does not lie in your job; it lies in your own power to produce – to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth.

Steven Covey

As a top-performing sales professional in supply chain/logistics for almost 20 years, Jeff Davis has been putting his commissions to work for him in real estate since 2015 and is now partnered in almost 2000 units across 4 states in the US

Learn how your commissions earn commissions at https://www.bridgestoneinvest.com/join/