Real Estate Partnerships Provide Scalability
With Percy Nikora, Co-Founder
So when you're coming into, let's say, a fund or a syndication that's purchasing a property, you would typically do that to purchase a larger property than you would be able to buy by yourself. You know, the properties that are typically purchased are 100 units, 200 units. In our case, we have over five hundred units, in some cases under a particular partnership. And obviously, when you've purchased that many units together, there's some economies of scale that come along with it.
From a renovation standpoint, from a leasing standpoint, from a staffing standpoint. All of those benefits, you know, come through the benefits of scale.
So, typically when people start investing in real estate and I'll use myself as an example, when I started purchasing the properties initially, you look at single family properties, then maybe you look at, you know, 4 units, 8 units, 10 units. I was looking at properties up to maybe 50 units, I could purchase by myself. But the challenge then is, in order to staff that property, we cannot have dedicated maintenance. You cannot have dedicated leasing for anything around, less than, let's say, 80 to 100 units. So when you start looking for those larger properties, you need a team to come together in order to purchase that. And the profits that are generated through that larger acquisition are typically higher as well, percentage wise. And but, however, the amount of money that you are looking to invest stays the same because, again, you're pulling these funds together. So, it's not like you'll be out of pocket more than you normally would. In fact, you can take a smaller piece of a larger pie and still make a decent return on the investment.
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