The Cash Flow Solution: How To Secure Your Financial Future With Low-Risk Real Estate Syndicates by Hillman Daryl R

Author:Hillman, Daryl R. [Hillman, Daryl R.]
Language: eng
Format: epub
Publisher: Lioncrest Publishing
Published: 2016-01-19T16:00:00+00:00

We handle the active asset management of the investment .

In the property management piece, we handle all the day-to-day activities of the property. This would include the sometimes undesirable tasks of collecting of the rent, the payment of the bills, the maintenance of the property, keeping track of the accounting, and reporting to the syndicate owners. All of that’s looked after to make it passive so that the owner has really little or nothing to do, other than go online and check their reports.

The other level of management is asset management. That has to do more with the higher level view of the investment, things that deal with mortgages or loans or leverage. What’s happening with those? Is the term of the loan coming up, so there’s going to be an interest rate adjustment? How will that affect us?

If interest rates are rising, we’d have to anticipate that that’s going to affect the cash flow, if there’s going to be more interest paid. If interest rates are going down, can we reduce the amortization period and maybe pay for the property faster because we’re paying less interest? Should we upgrade the building to better compete in the market?

Should we consider selling this property in this high market and purchase a replacement property in a lower market?

All of those asset management issues are looked after for the investors, making this a very passive investment.

At the asset management level, we might have a reason to call together an investor meeting occasionally, based on a background investigation into the mortgage rates or lease rates or market values. That often gets into larger strategic decisions that we need everyone’s input toward.

For example, if we think it’s a good idea to revisit the mortgage for some new reason, that would be cause to call the investors together in a meeting. Often, that’s done online now with teleconferencing, like GoToMeeting, Skype or FaceTime.

We’ll explain everything we’re thinking: “Here’s what’s going on. Here’s what we’re finding. Here’s what we believe our options are, and what our recommendations are. Let’s discuss them and pick one.” And there will be a vote where the majority rules, and that’s what we’ll do.

When we vote on issues, it’s almost always a complete consensus of agreement, because we’ve thoroughly discussed all the options.

Investors Can Take a More Active Role, if They Wish

Our objective is to make the investments as passive as possible, but the investor can always take the initiative to become more active as they wish.

There are varying levels of this. The basic form of it can be found in simply being a bit more active in the discussions we have, or by calling and asking what’s going on. They can go on the website for owners, check out their reports, and then call and ask any questions they might have. We’re looking after it at all times, but always available to answer questions.

And if they want to have more active say in the direction and operation of the project, they can put their name forward to serve on the board of directors.

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