In this episode, Chris Roberts reviews investing in the Sterling Rhino Capital Equity Multiple CF Fund 1 versus investing directly in an asset.

Welcome to an episode of the new Create Your Fortune Podcast, the show where we help regular women and men transform their income, savings, and businesses into passive income through real estate. We teach, coach, and help you learn how to invest in safe, reliable “insider” investments to build real wealth and freedom.

This show is sponsored by Sterling Rhino Capital, a real estate investment group for regular families, professionals, and those left “out” of the insider access to high returns and safe ways to make a fortune. A+ rating by Better Business Bureau, Forbes Contributor.

 

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How To Invest 5K

We are going to review investing in the Sterling Rhino Capital Equity Multiple CF Fund 1 versus investing directly in assets. Why would you invest in a fund versus directly investing in an asset like a multifamily apartment complex? I will also briefly cover the difference between REIT, which you may have heard the term Real Estate Investment Trust or investing in mutual funds that hold real estate. The difference between funds and direct assets is those are tangible assets.

You can put your hands on those buildings. You own part of those buildings as a limited partner versus a REIT or a mutual fund. It is like a stock. You do not have as many advantages as it relates to depreciation, so those K-1 statements. In some cases, if you have passive income from other assets that you own or other streams of income, you can sometimes take advantage of that depreciation.

Even if you don’t, eventually, you can, in most cases, because you will have passive cashflow at some point once you start investing. That is pretty cool but you do not get that benefit generally with REITs or mutual funds. Why would you invest in a fund versus directly into an asset? Some of the reasons would be you want to diversify. You want to go into real estate investing, and maybe you do not know much about it.

You don’t have as much experience as an accredited investor. You don’t have that high net worth. You don’t have that high average income. You don’t have access to as many of the deals. In a fund like this, you can invest and get in for as little as $5,000. You could test the waters a little bit. You want to invest in a fund because it diversifies across different assets.

Real estate outperforms the stock market all day long. It’s a great way for you to diversify your investment portfolio.

If you invest in a fund, then you are going to be investing in 4 to 6 assets. In this case, there are going to be six assets. Six apartment complexes for one investment, which means you, as a limited partner investor, only have to sign one set of legal documents. Once you have reviewed the presentation, the webinars, the videos, and the offering, then you will go through and sign the legal documentation. Any presentations you see or information in this show is not an actual official offering. It’s a guideline. It’s information. Once you review those legal documents, that is your official offering. You sign those documents, and then you are ready to wire funds.

We encourage everybody to share those documents with your CPAs or real estate attorneys to review if it fits your criteria or whatnot. The reason you would invest in a fund is that it gives you diversification over multiple assets. Especially if you are starting, it is a great way to get into it because you get a chance to see how all these different apartment complexes are run.

In this example, we use Class A assets. These are assets that have, in most cases, solid surface countertops. They’ve got beautiful build-outs, Zen gardens on the roofs, infinity pools, and gyms. You are going to have common areas for barbecues, usually on one of the terraces up top or one of the floors. You are going to have bike areas for people to lock their bikes. Dog washing stations, sometimes restaurants or coffee shops down in the lobbies will be mixed-use.

You will have retail at the bottom, and then you will have residential or even retail office and residential. They will range anywhere from 6 to 15 stories. These assets will be anywhere from $30 million to $100 million projects. By investing in this fund, you are investing in multiple assets across different markets. In Downtown Denver and in Phoenix, Arizona, which are two of the hottest markets for growth migration, average household income. A lot of corporations are going there. They are exploding.

 

It is perfect for this asset class because the average household income is much higher in those markets as well as these corporations come to market. There is such a shortage of housing. Why would someone invest in a single asset? Maybe that is all they have access to. They do not have access to a fund that allows them to get into multifamily investing across different assets like this. For example, if you don’t have the status of income or net worth to get access to all the deals that are available, then you may be limited, which is why this is unique.

It is rare that you see a fund with a bunch of Class A assets in it where you can get in as low as $5,000, especially when you don’t meet that million-dollar net worth or $200,000 to $300,000 in income across a single individual or you and your spouse over a 2 to 3-year period. It can be difficult to find opportunities. That is a reason why you might invest in a fund like this versus investing in an individual asset. An individual asset may be coming your way a little more often than a fund like this. Maybe that is why you might invest in an individual asset.

Perhaps you like that particular market class of asset. Class C, Class B, and Class A are all determined by the amount of income that they bring in per unit or the amenities that they carry. Sometimes the neighborhoods they are in but maybe the neighborhood is close to where you live, and you feel more comfortable investing that way. There are a lot of reasons somebody might invest directly in an asset but we have found that there is far more diversification and security going into an asset that holds six different complexes.

That is why we love these equity multiple funds. The fund return structure in here is a 3 and a half times to 4 and a half times equity multiple. Let’s use an example of $100,000. $100,000 could potentially be worth $350,000 to $450,000 in 5 to 7 years down the road. You will share in an 8% preferred return. You get that 8% preferred return or cashflow that is available, which is nice if you are looking for passive cashflow. It is a great way to create that.

You are also going to get depreciation. You get a little bit of tax write-off. Generally, you want to talk to your CPA. We are not financial advisors by any means but you get to take advantage of that as well, and this fund across all those assets. This is a great way to grow your wealth. There is no doubt about it. Real estate outperforms the stock market all day long, especially when you look at the 100-year averages. It’s a great way for you to diversify your investment portfolio. If you are interested, review all those documents. Take a look at them with your CPA, if you like. You wire your funds and are ready to go. I hope this has been helpful. Please reach out if you have any questions.

 

Important Links

• Sterling Rhino Capital
• https://www.SterlingRhinoCapital.com/create-your-fortune-podcast/