Crypto Millionaires & Billionaires Can Leverage Real Estate for Tax-Free Income

by | Jan 30, 2022 | BAM Blog, Multifamily Syndication, Real Estate Investing | 0 comments

Investors are always careful about their finances, particularly where they put their money into. This is why a lot of investors compare different asset classes and weigh their pros and cons before investing.

Real estate and cryptocurrencies, for example, are usually compared with one another: with investors trying to figure out which one to go for. They each have their benefits. Cryptocurrencies are decentralized, easy to sell, have no fear of inflation, and have incredible long-term potential. On the other hand, real estate is tangible, stable, and usable. Choosing the right one is therefore not an easy task. [4]

As a lot of millennial millionaires have proven, investing in crypto could be the best move for your personal finance these days.

But if your goal is to grow your wealth, you will see the value in both asset classes. Smart investors will realize that these are some of the best ways to make a huge profit. So if you are one of those who have found wealth in crypto, leveraging real estate could help you grow your wealth even faster. For both of these asset classes, the future is bright, so you might as well take advantage of them.

The only problem with real estate is that it can be quite hands-on. You have to be directly involved in the property you purchased in order to make a profit. But there is one way to grow your net worth through real estate without taking on all of these extra responsibilities, and that is through multifamily syndication, which we will be discussing later.

You Make Money in Crypto? Learn How to Pay Less Taxes by Investing in Multifamily Syndication Real Estate​

Some crypto millionaires and billionaires are interested in investing in real estate but don’t have the time and energy to manage it themselves. The best solution may be multifamily syndication: a real estate investment that is low risk and passive. You get continuous earnings from cash flow, but don’t have to deal with tenants.

Real estate investors participating in syndication can enjoy the benefits of owning an investment property including tax breaks, appreciation, and cash flow, without all the work associated with being a landlord.

Real estate syndication is when multiple investors pool their resources together in order to purchase a single property. A multifamily syndication is when multiple investors purchase a property with more than one unit such as a duplex, a triplex, or a condominium.

A sponsor or a syndicator puts the deal together and then locates investors to participate in the syndication. The syndicator’s job is to underwrite the deal, complete due diligence on the property, arrange the financing, negotiate with the seller, find investors, and manage the property once the deal is done. This means investors don’t have to shoulder the responsibilities of a landlord: no need to handle tenants or deal with emergencies. [1]

The sponsor may work with a third party property management team to handle the asset. In any case, the investors don’t have to worry about the property because someone will manage it for them. For vertically integrated companies like BAM Capital, they have an in-house property management company. 

In a syndication deal, the sponsor takes charge of the property on behalf of the investors. The sponsor may also hire a third party organization for property management. For their role in the deal, the sponsor typically receives fees and/or a percentage of the “distributable cash” left after all the expenses and loan obligations have been paid.

Investors provide most of the capital to acquire the property, and in exchange they get money from the cash flow as well as the equity upon resale. They will usually get a monthly or quarterly check, depending on the deal structure, which is a passive source of income for investors.

How Real Estate Syndication Can Help You Earn Tax-Free Money​

As an investor in a multifamily syndication deal, you can earn passive income. At the same time, you can enjoy many tax benefits that usually apply to property owners. This is because the government wants to encourage investors to keep pursuing real estate for the national economy. Real estate investors are invaluable to the economy so they are rewarded through tax benefits. [2]

Depreciation is one way for real estate investors to write off an asset’s worth with time. Real estate properties tend to depreciate in value over time, so after a while, the property will not be as valuable as it was when it was first purchased. It can only be improved through repairs, renovations and upgrades.

This is why even if you make money through your property in its first year, the tax office will consider it as a loss and you wouldn’t have to pay taxes on it—depending on your tax situation. [2]

By owning real estate, investors can enjoy these tax benefits and continue growing their net worth as a crypto investor. For more information about your personal situation, always consult your CPA.

Support Your Crypto Gains with Real Estate Investments​

Crypto investing has already proven very lucrative for a lot of people, especially early adopters of bitcoin. But you can grow your wealth further—and with little effort through multifamily syndication. It’s a passive investment so you can earn money while you sleep and focus on other important things. With this arrangement, you can invest in real estate without the hassles of managing tenants or dealing with emergencies. [1]

Real estate investing is perfect for crypto millionaires because it provides another source of income. Multifamily syndication is a great passive income play for cryptocurrency elite.

Since you have already proven that there is wealth in crypto, you may be interested in a different kind of investment, but you don’t have the time to become actively involved. Choose multifamily syndication.

The only challenge of real estate syndication is that you have to work with an experienced and trustworthy syndicator before jumping into it such as BAM Capital.

Why Work with BAM Capital​

For crypto millionaires and billionaires who want to try multifamily syndication, BAM Capital may be the best option because of its vertical integration model that mitigates risk for investors.

BAM Capital prioritizes Class A multifamily properties because it values low risk investments for passive investors. It also has a strong Midwest focus, prioritizing Class A, A-, and B++ multifamily properties in that area. [3]

BAM Capital will arrange the syndication deal so there is no need to purchase an asset on your own. BAM Capital will also handle property management.

BAM Capital works with accredited investors and negotiates the purchasing and financing of high quality multifamily real estate properties on their behalf. This Indianapolis-based company currently has over $700M AUM and 5,000+ units. Schedule a call with BAM Capital and invest today.