RedPillKapital Investments


Let us help you receive more passive income

Active Investing

Active investing is the acquisition of a single property, with the goal of utilizing it as a rental property and often turning over the ongoing management to a third-party property management company.

Passive Investing

Passive investing is placing one’s capital into a real estate syndication that is managed in its entirety by a sponsor. You are a limited partner in the deal. You transfer capital to an experienced sponsor who will use that money to acquire and manage the entire project.

Active Passive
Control You directly control the business plan. No direct control over any aspect of the business plan, so you are putting a lot of trust into the sponsor and their team.
You decide which investment strategy to pursue. You decide the type and level of renovations to perform. You decide the quality of tenant to accept and the rental rate to charge. You determine when to refinance or sell. Trust is established by not giving your money to a random, unqualified sponsor but through an alignment of interests.
Syndicator is financially incentivized to achieve a return above and beyond the preferred return.
Active Passive
Time Commitment The advantage of more control comes with the disadvantage of a greater time commitment. You just need to initially vet the real estate syndicator and the deal. From there, you simply invest your capital and read the monthly or quarterly project updates.
It is your responsibility to educate yourself on the ins and outs of single-family rental investing. Then, you have to find and vet various team members. Once you have a team in place, you have to perform all the duties required to find, qualify, and close on a deal. After closing, as long as you have a good property management company, it should be pretty hands-off. Ongoing oversight is delegated to the syndicator.
Active Passive
Risk With higher risk comes a higher upside potential. You own 100% of the deal, which means you get 100% of the profits — and 100% of the losses. Much less risk as a passive investor.
Costs associated with one large maintenance issue or a turnover could wipe out months, or even years, of profits. More certainty on the returns.

Even if you plan on being an active investor, the benefits to an aspiring syndicator or active investor from passively investing as a limited partner are:

Practice evaluating and underwriting large real estate deals
Ability to ask questions of an experienced syndicator
Credibility as a partner in a larger deal
Gain Fannie Mae prior deal experience

Since you will have experience reviewing deals and are able to tap into the knowledge and experience of the general partner, your transition into active investing or syndications will be more seamless.

Passive strategies
Syndication REIT (Real Estate Investment Trust)
A syndication is when a syndicator (i.e., the general partner) pools together capital from passive investors (i.e., the limited partners) to purchase a real estate community while sharing in the profits. A REIT is a company that owns, operates, or finances income-producing real estate that generates revenue, which is paid out to shareholders in the form of dividends.
Syndication REIT (Real Estate Investment Trust)
Liquidity Less liquid — your initial investment is locked in until the end of the projected hold period, which is typically 5-10 years. Ability to buy and sell like a standard stock.
Syndication REIT (Real Estate Investment Trust)
Barrier To Entry Financial barrier of entry is higher for real estate syndications. A large sum of capital isn’t required. Most REITs have no minimum investment, although they may require that you purchase blocks of 10 or 100 shares.
May need to be accredited, which means having an annual income of $200,000 or $300,000 for joint income for the last two years, or an individual or joint net worth exceeding $1 million. Additionally, real estate syndication may require a minimum investment. Low barrier to entry.
Syndication REIT (Real Estate Investment Trust)
Diversification Your return is directly tied to the performance of a single asset. With REITs, you invest in a diversified portfolio of properties that provide a blended return. Because the risk is shared across a pool of assets, you will not see major fluctuations in your returns and portfolio value.
You can make up for the lack of diversification by investing in multiple syndication deals, essentially creating your own personal REIT. Diversification reduces risk, but usually reduces return.
Syndication REIT (Real Estate Investment Trust)
Returns Higher average returns; our typical ROI is greater than 40%. The total REIT return over the last five years (May 2013 to 2018) is 25.213%, including dividends and distributions.
Syndication REIT (Real Estate Investment Trust)
Ownership You benefit from having direct ownership of the underlying asset. The major benefit of direct ownership is transparency — you see the actual asset you are investing in. Multiple properties, non-specific.
Direct contact information of the person calling the shots. Management group is isolated from investors.
Syndication REIT (Real Estate Investment Trust)
Taxes You have the opportunity to utilize the 1031 exchange tax instrument, which allows you to defer the taxes on your profit at sale by reinvesting in another deal with the same asset type. Usually no 1031 exchange.

Learn About Passive Investment Opportunities for Accredited Investors

Qualified investors can invest with us on our next deal!

We know how to find the property, create a plan for improving the cash flow (if necessary), and negotiate the deal. Your passive investment provides you with the opportunity to earn an income without the 9-5.

We create a unique business strategy that fits your financial and investment goals.

We specifically target markets and property types and find co-investors who have experience and share our drive. Get the financial freedom you need to do more of what you love!

Ready to make your money work for you by investing it in multi-family real estate, but without the hassle of property management?

We’d love to talk with you about partnering with us on real estate deals. We can see what you want to accomplish, explain what we do, and see if it makes sense to work together.