For many investors, breaking into passive real estate opportunities can feel out of reach. Minimum investment thresholds of $50,000 to $100,000 often block participation, leaving only accredited investors with access to high-performing syndications, funds, and partnerships.
In this episode of Tax Sale Insiders, host Brian Seidensticker sits down with Brian Davis, co-founder of Spark Rental, to discuss how co-investing clubs are changing that equation.
What Is a Co-Investing Club?
Spark Rental’s co-investing club operates like a modern version of a traditional investment club. Each month, members meet to review and vet a new passive real estate opportunity—ranging from private notes and funds to real estate partnerships.
By pooling funds into a single LLC, investors can participate in large-scale projects with as little as $5,000 per deal. Each LLC then invests directly into that month’s featured opportunity. Members gain exposure to high-quality real estate projects without needing the large minimums typical of private equity.
Accessibility and Accreditation
Unlike most private syndications that require accreditation, Spark Rental’s mission is inclusivity. About half of its members are accredited, but the club focuses on opportunities open to non-accredited investors as well.
This approach allows everyday investors to access passive real estate income and diversify across multiple projects—rather than tying up all their capital in one high-risk deal.
Diversification Through Dollar-Cost Averaging
Davis explains that he invests his own money alongside members each month. By contributing smaller amounts to multiple deals, investors effectively dollar-cost average their real estate exposure.
This strategy spreads risk across different asset classes, operators, markets, and time horizons—creating a bell-curve effect where individual deal outcomes average out to stable overall returns.
“You’re going to have some deals underperform and others overperform,” Davis notes. “But when you’re diversified across 10 or 12 deals a year, you can sleep much better at night.”
How the Structure Works
Each monthly LLC receives a single K-1 or 1099, which Spark Rental’s accounting team divides among participating members. A small annual administrative fee (currently around $75 per member) covers tax filing, K-1 preparation, and quarterly distribution management.
Members also pay a flat subscription fee ($59/month or $497/year) to belong to the club—ensuring the organizers remain independent and aligned, not taking any portion of deal returns.
Real-World Examples
Spark Rental’s deals vary widely—from secured notes with 15% fixed interest to property tax abatement projects and industrial sale-leasebacks. In one example, the club negotiated a first-position lien on an operator’s primary residence to add downside protection.
Another recent investment partnered with a municipality on affordable housing units, producing a six-figure annual tax savings while strengthening recession resilience.
These creative structures give members access to asymmetric risk opportunities—high potential returns with controlled downside exposure.
Results and Long-Term Vision
Over three years, Spark Rental’s co-investing club has completed more than 35 investments, with some deals already going full cycle and paying out as projected. The club targets mid-teen returns or higher, focusing on opportunities where risk is mitigated by tangible collateral or favorable deal terms.
Davis emphasizes that for passive investors, consistency beats speculation. Regularly allocating smaller amounts builds wealth more sustainably than chasing the next hot market or single large investment.
Final Thoughts: Passive Investing from Anywhere
Davis founded Spark Rental while living abroad for nearly a decade. The experience taught him that passive real estate investing can be done from anywhere in the world—no property management or local presence required.
For investors seeking hands-off exposure to real estate cash flow and diversification beyond the stock market, co-investing clubs represent an accessible entry point.
