frequently Asked questions

Our strategy focuses on acquiring undervalued or value-add multifamily properties in markets with strong economic and demographic trends. We aim to increase value through strategic renovations, improvements in property, management, and optimized operations.

The expected ROI or Cash-on-Cash Yield varies per project but ranges from 6% to 8% annually. We target a 15%-20% IRR and an Equity Multiple of 1.5x - 2.0x.

The investment is structured as a limited partnership where LPs contribute capital, and the GP manages the investment. LPs share in profits according to their invested capital after the GP receives a management fee and a carried interest. LPs are passive investors, and the GP is responsible for spearheading all investment activities on behalf of the limited partners. The general partner may also be referred to as the GP, the “sponsor,” the “key sponsor,” the “promoter” or the “developer.”

The responsibilities of the GP are vast and include, but are not limited to, identifying potential deals, underwriting and conducting all due diligence on deals, putting deals under contract, lining up the debt and equity needed to finance the deal, crafting the business plan for the deal, overseeing any necessary construction activities, property management, asset management, lease-up and stabilization of the property, refinance or eventual disposition of the property.

Typical investment accounts are as individuals, joint accounts, tenancy in common, entity accounts (Trusts, Limited Liability Companies, Limited Partnerships, C Corporations, S Corporations), and individual retirement accounts (more info on IRAs / 401k’s below).

Yes, you can invest through your IRA. If you have a self-directed IRA, please check with your current custodian to ensure they allow you to place your investment with Yankee Capital Partners. If you haven’t converted from a traditional IRA to a self-directed IRA, you’ll need to contact a custodian to help you. If you need a referral, we can connect you with a custodian.

The minimum investment amount varies per property and is typically $50,000.

Risks include market risk, property-specific risks, interest rate fluctuations, inflation, and economic downturns. However, we mitigate these through careful market analysis, disciplined property examination and valuation, diversified portfolios, and experienced management.

The typical investment period ranges from 4 to 7 years. This allows time for implementing our value-add strategies and capitalizing on market growth.

Investors receive quarterly updates from us. These updates include financial statements, occupancy rates, and updates on any property improvements. By logging into our investor portal, investors can view monthly property data, distributions, and investments with us.

Our exit strategy usually involves selling the property after realizing significant value growth, typically in 4 to 7 years. The sale proceeds are then distributed to the LPs.

Yes, our LPs can visit the property. Please coordinate with us in advance for a guided tour and detailed discussion.

Property management is handled through our partnerships with nationally recognized property management companies, ensuring efficient operation, focus, and tenant satisfaction. We oversee the property management staff and have weekly calls to ensure focus and accomplishment of goals.

Yes. Investing as a Limited Partner (LP) in a real estate multifamily syndication can offer several tax advantages, making it an attractive opportunity. These benefits stem from how real estate and partnership income are treated for tax purposes. Here are some key tax advantages often associated with such investments:

1. Pass-Through Deductions
Passive Income Treatment: As an LP, your income is typically considered passive income, which might have different tax treatments or benefits depending on the investor's overall tax situation.

Pass-Through Taxation: Multifamily syndications are often structured as partnerships or LLCs, which are pass-through entities. Income and losses are passed through to the investors, who report them on their tax returns, potentially avoiding double taxation.

2. Depreciation

Cost Segregation: A cost segregation study can accelerate depreciation on certain parts of the property, like fixtures and fittings, allowing for more significant upfront deductions.
Depreciation Deduction: Depreciation allows investors to deduct the costs from wear and tear of the physical property over time, even while the actual property may be appreciating in value. This can significantly reduce taxable income from the property.

3. 1031 Exchange

Deferral of Capital Gains: A 1031 exchange allows investors to defer paying capital gains taxes on the sale of a property if the proceeds are reinvested in a similar property. This can be a continuous strategy for deferring taxes while growing investments in real estate.

4. Mortgage Interest Deductions

Interest Deductions: LPs can typically claim their share of the interest paid on mortgages taken out for the property, reducing the net taxable income.

5. Operating Expenses and Property Taxes

Deductible Expenses: Operating expenses, property management fees, and property taxes associated with the property are generally deductible, further reducing the taxable income.

6. Real Estate Professional Status
Special Tax Status: If an LP qualifies as a real estate professional under IRS rules (which requires significant participation in real estate activities), they may be able to deduct real estate losses against other types of income, not just passive income.

7. Capital Gains Treatment

Preferential Rates: Long-term capital gains from the sale of a property held for more than one year typically are taxed at a lower rate than ordinary income, which can be beneficial when the property is sold.

8. Phantom Income Protection

Non-Cash Deduction Benefits: Sometimes, due to non-cash deductions like depreciation, the paper loss might exceed the actual financial loss, creating a situation where you're showing a loss for tax purposes while generating positive cash flow.

As a partner in the LLC that purchases the properties, you will receive a K-1. A K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Partnerships are generally not subject to federal or state income tax. Instead, they issue a K-1 to each investor to report their share of the partnership’s income, gains, losses, deductions, and credits. The K-1s are provided to investors annually so that each investor can include K-1 amounts on their tax return.

Rising interest rates and oversupply in select markets have posed challenges for some investors. However, the U.S. economy is mostly stable, and the outlook calls for continued growth in the multifamily sector. Vacancy rates are near cyclical lows, renters are actively leasing apartments, supply is tight (in most markets), and operators are monetizing their properties beyond rent increases. Robust demand is being driven by several factors, including would-be buyers being priced out of the market for single-family homes, healthy labor dynamics, and a rebound in household formation. The fundamentals for multifamily may be the best we have seen over the multi-decade span of our careers.

The outlook for the overall multifamily sector is strong, and we anticipate that the undersupply of housing in the U.S. and advantageous demographic trends will continue to support favorable investment dynamics in the years ahead. This backdrop will bode well for multifamily asset values.