In our previous article we talked about the difference in the minimum amount a syndication and Mission First Capital’s fund allows. Now, we are going to look at the differences in terms of “how diversified is your money” you have invested in each option.
Syndications traditionally only allow investment in one property, usually a large property like a 200 unit apartment complex or a 300 unit self storage business. Either way, the money you put into the syndication is tied to just one property, in one market. You have put $50,000 into just that one apartment complex. What happens if that one apartment complex catches fire? Devastated by a hurricane? The market the property is in ends up falling out of favor with the general population and they move away? (We saw this happening in many large cities across the country during Covid-19 in 2020). Your $50,000 is tied to that one asset, for better or worse.
With Mission First Capital’s fund model, you are actually part of every property the fund buys. That’s right, every single property! Not just one property and not just a single market either! You are diversified across multiple properties, in multiple markets, with a smaller amount of capital! Now we call that a win-win for the average person, like most of our military brother and sisters are. You may not have time to study market trends, and rental demands, and average rental rates for one city for one deal. We know you are focused on your career as a service member. You have deployment work ups, training cycles, missions down range, often intermittent internet access too! Diversification, which is the same premise a mutual fund in a stock portfolio uses, allows an investor to be diversified across multiple assets at the same time. If one asset starts having a problem performing, think fire or hurricanes, then your returns are not as likely to be hit as hard as if you were invested ONLY in that one apartment complex.