Why Entrepreneurs Should Consider Joining a Real Estate Investment Group
Last Updated: September 30, 2o24
Steve Nabity
September 30, 2024
Why Entrepreneurs Should Consider Joining a Real Estate Investment Group
As an entrepreneur, it would be an interesting challenge to leverage your skills and risk capital in a new arena. If you can also achieve your financial goals while doing so, that would be an added benefit. We are talking about real estate. It is an asset class that offers growth, diversification, cash flows, and some inflation protection.
Some entrepreneurs and business owners may have already invested in real estate while others might not have any experience. If you are wondering whether you have the necessary knowledge or the experience to dedicate hard-earned capital to real estate, then we have an answer for you. Real Estate Investment Groups. Entrepreneurs are excellent at delegating tasks and recognizing how to leverage from others the skills that they don’t have. As natural risk-takers and visionaries, entrepreneurs and business owners know how to overcome hurdles by working with people, pooling resources and expertise, and teaming up to achieve success. Real estate investment groups have the same underlying philosophy.
In this article, we will discuss the benefits, for entrepreneurs and business owners, of joining a real estate investment group. We will understand what exactly a real estate investment group is, how resources can be pooled together to achieve an investment goal, how real estate investment groups offer business growth and networking opportunities, and why being part of such a group gives you exposure to practices and insights that you otherwise would not have had.
Luxe Apartments – Nashville TN
What is a Real Estate Investment Group?
A Real Estate Investment Group is a collaborative model that Skyline Point exemplifies. The group is made up of like-minded investors and professionals who pool their capital to invest in a portfolio of properties across geographies. By pooling capital, investors can access larger institutional-grade real estate deals that provide strong risk-adjusted returns. By constructing a portfolio of such strong properties, investors can benefit from diversification. As an individual investor, it may be difficult to access and execute such transactions.
Real Estate Investment Groups expand the horizons of business owners and entrepreneurs and allow them to build portfolios designed to achieve specific financial goals. Skyline Point Capital ensures that it brings only a pipeline of well-researched investment opportunities for its investors. Our idea of a real estate investment group is not an advertising forum where any and every investment opportunity is circulated. We are only focused on deals that our team has analyzed and that we are looking to co-invest in as a partner.
Being part of a real estate investment group also connects you to other like-minded investors with interesting professional journeys and skill sets. A real estate investment group is as much a horizon-broadening platform as an investment platform.
Benefit #1: Pooled Resources
The most prominent benefit of joining top real estate investment groups is the pooled resources of such groups. One individual investor may have a few hundred thousand or a million-plus dollars to invest. But, a few can bring in funds in the tens of millions. Suddenly, individual investors can go from looking at single units to investing in multifamily and commercial properties spread across acres of land.
Larger properties with multiple tenants offer benefits of scale. They also help reduce the risk of a tenant not paying rent. With a single-tenant property, one tenant defaulting on rent leads to zero income for the entire property. With a multi-tenant property, one default does not stop the cash flow. Larger properties can also attract large tenants with an appetite for long-term leases. It also becomes feasible to hire a property management service to achieve high operational efficiency. Institutional-grade properties offer strong returns that are stable and robust.
Pooling in resources makes it feasible to execute high-quality renovations and participate in value-add deals that can enhance returns. Incurring such expenditures may be cost-prohibitive for an individual investor. Thus, real estate investment groups, like Skyline Point Capital’s Founders Investor Club, allow its members to leverage collective expertise to maximize their investment returns.
Benefit #2: Diversified Investments
Diversification is closely linked with the concept of risk management. Whether it is a business or an investment, risk cannot be avoided. Every opportunity has a risk associated with it. Entrepreneurs and business owners are good at gauging that risk, taking a calculated bet, and then managing the risk.
Real estate is no different. There are certain key risks associated with real estate investing. They include tenant risk, location risk, interest rate risk, regulatory risk, and overall market risk. By joining a real estate investment group and pooling resources, some of these risks can be managed. Investing in multiple properties, for example, can mitigate location risk. Investing in properties with multiple tenants mitigates the risk of one or a few tenants defaulting on rents.
Investing in several real estate asset classes like multifamily, industrial, retail, etc. can mitigate the risk associated with a particular segment. For example, while the commercial segment goes through a severe downturn, multifamily and industrial segments have performed quite well. An individual investor may not have the capital to acquire a multifamily, industrial, and retail property. But, a group of investors with pooled resources can build a portfolio with such assets.
Diversification helps investors ride the downturn as the impact is not as severe. To diversify a real estate portfolio, it is recommended that you work with someone who has experience in building a diversified real estate portfolio. Skyline Point Capital has had decades of experience in investing across geographies and sub-segments. Our market knowledge and experience have allowed us to achieve strong returns by building a portfolio that is resilient to market volatility. Feel free to contact us and find out more about the Founders Investor Club at Skyline Point Capital.
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Benefit #3: Networking and Business Growth
An investment group that is well put together can be powerful for its members. It is made up of like-minded entrepreneurs and business owners who come from diverse backgrounds. They bring with them diverse mental models and experiences. Interacting with such a diverse cohort can broaden your horizons and, perhaps, even present business opportunities.
If you are someone who is just starting his/her entrepreneurial journey, then being part of an investment group can also help you find a mentor – someone who has been through the journey and built a successful business. The relationships that one can potentially build in a real estate investment group can open new doors for an entrepreneur.
From a real estate perspective, being part of a group gives you exposure to emerging market trends and the latest developments. Every member may have some sort of real estate experience to share. There may be strategic investment advice that an individual might not have access to. Ultimately, being part of a group is like being part of a community. Members may find support, share their challenges, and celebrate success together. At Skyline Point Capital, we try to ensure that our Founders Investor Club also has an emotional aspect.
Benefit #4: Access to Larger and More Lucrative Deals
Large transactions for large properties can, potentially, enhance a portfolio. More units can mean more possibilities regarding how you could implement a business plan after acquiring the property. Scale economies can also optimize costs and make it possible to run the property via professional management. Acquiring multiple properties adds diversification to a portfolio.
The benefits of going big in real estate are multifold. The challenge for an individual investor is how to go big. Participating in large transactions isn’t just about having the downpayment sorted out. One also needs to raise enough debt or equity and go through the due diligence process to get the deal across the line.
One either needs to have large capital to be able to participate in institutional-grade real estate deals or one needs to team up with like-minded folks to pool in enough resources to acquire and run large properties successfully. Investment groups not only combine the financial strength of their members, but they also spread the risk of an acquisition across multiple investors. So, as an individual, one gets exposure to a premium asset without shouldering the entire financial burden.
You can check out a host of resources available on Skyline Point Capital’s website to learn more about real estate investing. We have complimentary ebooks, podcasts, blogs, and much more.
Benefit #5: Expert Insights and Professional Management
As an entrepreneur or a business owner, you have a business (or multiple businesses) to run. Your interest in real estate may be from an investment standpoint where you want to add exposure to real estate as part of your portfolio management. Unless you are looking to get into real estate investing full-time, you may simply want to put up your capital as a passive investor. At the same time, the experts handle all the deal-related work and the day-to-day property management. You probably may not be looking to get involved with the day-to-day operations of a real estate portfolio.
This is one key reason why it makes sense to join a real estate investment group. You can get expert insights and professional management from professionals who live and breathe real estate. Skyline Point Capital’s experience and strategic approach allow it to make investment decisions, handle tenant relations, property and maintenance issues, operational complexities, and provide a streamlined investment process to all our investors. Our investors gain from our deep understanding of the market trends, knowledge about the local regulatory regime, and our valuation techniques.
Why Invest With Skyline Point Capital
At Skyline Point Capital, we are constantly looking for real estate investment opportunities. We pay special attention not just to the returns, but also to any tax benefits that we can harness through our investments. Having been in this industry for decades, we have built processes and the right network to source deals, underwrite them, complete the acquisition process, operate and manage the properties, and then execute our exit strategy to provide our investors with strong risk-adjusted returns.
You may request an invitation to join our exclusive community of business owners and entrepreneurs and get access to institutional-grade private real estate investing opportunities. Here is a brief background about Skyline Point Capital.
The Harlow Apartments – Dallas TX
Conclusion
We hope that you now have a good idea of what a real estate investment group is and how you can benefit by joining such a group. Besides the financial aspects, we have highlighted the benefits of being part of a community of like-minded real estate investors. Investing in any asset class requires a strong understanding of the return profile, risks, and trends associated with that asset class. Real estate is no different.
We highly encourage you to check out the resources that are available on Skyline Point Capital’s website to learn and educate yourself about real estate investing. Creating a portfolio of diverse assets that can handle the volatility of the markets is something that every investor looks for. We like to build such portfolios for real estate.
If you are a business owner or entrepreneur and are looking to start your real estate investment journey, then Skyline Point Capital can provide you with the right platform to build your wealth. We have investors with varying experience levels in real estate. We highly encourage you to join the Founders Investor Club. Feel free to get in touch with us to talk about your financial goals and real estate investing.
