A look at K-1s and what depreciation really looks like

Howdy GowerCrowders! We’re back with your weekly dose of industry news, new deals, platform updates, podcasts, and all of your favorite real estate crowdfunding media. 

We’ve got a lot of good stuff on the agenda this week. As is custom, we’ll look at two new deals, including a new timber offering, the Britton Timber Tract on AcreTrader, and New Investment Webinar for Park Place over at RealtyMogul, a ground-up multifamily development focused towards active seniors in Suburban Atlanta.

In general industry news, we’ll look at a writeup from The White Coat Investor that looks at real estate K-1s, giving you insight into what depreciation really looks like. We’ll also look at Part 3 of RealtyMogul’s ongoing investor education series: Part Three: IRR vs. Cash-on-Cash.

Finishing things off, we’ll look at two new podcasts, including the latest episode of “The Real Estate Crowdfunding Show,” including a discussion with real estate investor Ryan Windley and a look at the intersection of female empowerment and real estate crowdfunding with Kaylee McMahon on the Wealth BuildHERS Podcast. 

Let’s get into it.

New Crowdfunding Platform Deals

Farmland continues to be a hot topic in the real estate crowdfunding space, as well as the broader real estate market and economy. While we’ve covered productive farmland here in the newsletter for several years now, it seems the financial press and media are now taking a longer look at the potential benefits (and pitfalls!) of investing in fruitful farmland. 

Even the Gray Lady herself, the NY Times, is covering the future of farmland with a recent piece that examines the boom in farmland interest in the US- and how farmers are coping with their brave new world.

With that in mind, head over to AcreTrader to see the Britton Timber farm, an 1848-acre timber tract in Brunswick County, North Carolina, roughly 50 miles south of Wilmington. This planted pine and bottomland hardwood timber farm gives investors the ability to invest in an institutionally managed, long-term forest with trees in several different stages of growth, ensuring continued cash flow for the foreseeable future. 

Moving on, we’ve got a new investment webinar for Park Place, a ground-up, active-senior-focused multifamily development that sits in the suburbs of Atlanta, GA.

The webinar will cover all the big questions behind the project, like its IRR, equity multiple, and all the other details you need to know in order to make an informed decision. 

It’s being held on November 17, 2022, at 1 PM PST at this link. If you happen to miss it, don’t fret, click this link to see a recorded version.

General Crowdfunding Industry News

The IRS K-1 tax form strikes fear in the heart of many investors. It comes from Schedule K on IRS Form 1065, also known as the Partnership Tax  Return form. Those investing in private funds and syndications need to file a K-1 to help determine how much depreciation they actually get at the end of the day. 

The White Coat Investor recently penned a writeup about the dreaded K-1, with a good rundown of everything you need to know as a current or prospective investor- including info about extensions, whether you have to file in multiple states, and several other areas of interest. Check it out here.

Crowdfunding Platform Updates

RealtyMogul has recently released several articles looking at how investors on the hunt for passive income can generate it via the power of real estate crowdfunding. In this series, they look at passive real estate investments via crowdfunding in granular detail- with this week’s episode titled Part Three: IRR vs. Cash-on-Cash. 

They cover how investors can use IRR to evaluate a commercial real estate investment, cash flow, and how it may fit into your personal investment strategy. 

Give the latest chapter a read at RealtyMogul, here. If you missed the first couple of articles, no worries! You can find previous editions of RealtyMogul’s Five-Part Guide for Commercial Real Estate Investors Seeking Passive Income here.

Multimedia Links (Videos, Podcasts, etc.)

We’ll finish things off with two new podcasts.

The first is a look look at the growing impact women are having in the real estate crowdfunding world. Kaylee McMahon, known as “The Apartment Queen, discusses several issues related to the subject in the latest episode of the Wealth BuildHERS Podcast.

She covers the value of financial education in empowerment, how to create a financial mindset, and a general overview of the ecosystem and facts on the ground in the world of real estate crowdfunding. Listen for yourself on Listen Notes, here.

We will end things with a look at the latest episode of “The Real Estate Crowdfunding Show.” In this week’s episode, Dr. Adam Gower speaks with Ryan Windley, who is a teacher and trainer by trade and a real estate investor by passion. According to Ryan, he’s found a way to “hack” the Groundfloor real estate crowdfunding platform to generate outsized returns relative to how much risk he assumes- yielding around 11% on three years of loans with high-risk profiles, loans that should not be yielding more than 7%. 

They how Groundfloor makes loans and how it grades the quality of those loans, with higher returns for riskier “Class D” loans and lower returns on lower risk projects that fall under “Class A.” 

Want to see how he does it? Listen to The Real Estate Crowdfunding Show here.

That’s it for today, but we’ll see you next week with lots more news stories, platform updates, podcasts, and more!