August 2019 Newsletter from Madison Investing

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Under no circumstances should any material at this site be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any investment. Any such offer or solicitation will be made only by means of the Confidential Private Offering Memorandum relating to the particular investment. Access to information about the investments are limited to investors who either qualify as accredited investors within the meaning of the Securities Act of 1933, as amended, or those investors who generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments.

August 2019 Newsletter

Emerging deals, closed deals, education and updates.

Hi cash flow enthusiasts -

Dallas, Texas ("DFW") has been a key market for us over the past 12 months. I recently made the trip out to DFW to enjoy some of that famous Texan summer heat - but really, it was for a couple compelling reasons that our Limited Partners (you) will appreciate. In the 3 minute video below, I share some of those reasons (e.g. new partnerships and 4 site tours of closed projects from the past year.)

In the next month, you will see Madison Investing dialing up our exposure in the media.   After a year of procrastinating, I have finally caved in and agreed to guest on high-profile podcasts - including Rod Khleif's LifeTime Cashflow and Jason/Pili Yarusi's REI Foundation. It's been a blast building relationships with these influential and brilliant operators. I try not to get star struck, but it will always feel unnatural sitting across the table from my heroes.

​Here is the leanest project performance update, ever:

  • To date 100% of Madison Investing projects are delivering on-or-above proforma.

  • Limited Partners who are actually invested in a given deal receive detailed financials each quarter.

  • Some operators also provide monthly snapshot updates that include occupancy rate and unit renovation updates

  • If you want to see insights on those projects, but are not invested in them... I am happy to chat about it on a case-by-case basis.

  • You want lean newsletters that give you solid insight and we don't want to bore you. So, we won't go as deep on these unless you specifically reach out and request it.

DFW Trip

DFW Highlight #1 - Deal Maker Live conference

The Deal Maker Live conference was highly productive. In a business that is (still) largely relationship-driven, it is critical to connect face-to-face with partners on the GP side ("general partner" / operator), LP side ("limited partners" / passive investors) and vendors (real estate specialized tax firms, investor portal providers, retirement account, etc).

All the emailing, texting and phone calls in the world can not match the trust-level you establish in an hour-long personal conversation.

DFW Highlight #2 - Site visits to 5 properties

On Saturday during the conference, I hired a private driver to take a whirlwind site tour of 5 projects we have closed on with our partners, in the past year.  From an location perspective, they couldn't have been more inconvenient - each was located on opposing N/S/E/W portions of the map. That said, it was a blast. Great driver, great weather and excellent validation on the progress of these projects. You can admire my Captain Morgan-esque posing skills below, 4 of the 5 properties. Note: the signage for Exchange 7272 is attached to the building, so I couldn't snag a pic of that one.

 

Properties visited: Northern Cross, The Lexington, Estates at Las Colinas, Exchange 7272 and Highlands of Preston (which closes this next Monday!)

Education

Using retirement funds to invest in real estate

I just opened a retirement account that let's me invest my 401k/IRA funds in pretty much anything I want.

 

This week, I rolled over my own personal retirement accounts (aka - my 401k/IRA 'nest egg' worth $xxx,xxx) out of a traditional custodian (Vanguard, Fidelity) and into a significantly more flexible and tax-favorable account type called an eQRP - a Qualified Retirement Plan.   We have members in this community who actively invest in our projects using retirement funds with these account types, right now.

 

This was a financial milestone, for me. I had contributed to those accounts for a decade - starting in my 20s and dumping a % of my paychecks into them, every couple weeks. Some investors have known about these accounts for years, but if you are new to them, here are a couple of differences:

 

Freedom: In addition to investing in stocks (which is what most 401ks/IRAs restrict you to) I can also now use retirement funds to invest in things like REAL ESTATE and PRECIOUS METALS

 

Tax-favorable: When I use these funds to invest in real estate, I avoid getting taxed more heavily on leveraged real estate investments

 

This post is about a personal decision related to use of my own funds. I drafted a new version of the "Investing with Retirement Funds" page of our website if you want to learn more.

Don't be greedy.

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